Posts categorized "▪ 42 U.S.C. § 1983 | Civil Rights"

February 12, 2018

Here is the video of last Friday's oral arguments in a case we've been following, in which the owners of a mobile home park successfully challenged a California municipality's rent control ordinance as a taking.

In Colony Cover Properties v. City of Carson, a U.S. District Court for the Central District of California jury awarded the park owner just compensation, concluding that under Penn Central, the rent control ordinance was a compensable taking. The total award to the park owner, including damages for lost rental income, attorneys' fees, and interest, was over $9 million. As far as we can tell, this is the first case in which a mobile home park owner has succeeded in obtaining compensation for a taking for rent control.

Predictably, the city went ballistic, and its brief in the Ninth Circuit argues the City is the aggrieved party:

In April 2006, Plaintiff Colony Cove Properties, LLC made a highly leveraged purchase of a rent-controlled, senior-citizen mobilehome park, Colony Cove Mobile Estates, with $5 million down and $18 million in financing. Plaintiff wagered that it could obtain a rent increase to force the residents of the park to bear the cost of 3Plaintiff’s enormous debt service—some $1.2 million per year. When Defendant City of Carson refused to allow that, Plaintiff turned to the Fifth Amendment’s Takings Clause to conscript the City’s taxpayers as insurers of Plaintiff’s investment.

Opening Br. at 1. The City also argues that the jury verdict threatens the very existence of rent control.

Read the remainder of the city's Preliminary Statement and see if the rent control board's process doesn't make it seem like the city -- and not the owner -- is the entity actually calling the shots on how the park is financed and operated, and how much if "enough" for the owner to make off of his investment. In short, it really looks like the City owns and operates the park like a public housing project, doesn't it?

Last Friday, the court convened in Pasadena for oral argument. Check out the video above and see whether you can predict the outcome.

This year's conference has been a big success. More than 250 attendees and faculty, and -- very importantly -- nearly 100 first-time attendees. This bodes well both for the Conference and the eminent domain and property bar.

A big thank you to our ALI-CLE Program Attorney Amy Weinberg for undertaking the planning and execution of this very good conference.

December 26, 2017

In Cappel v. Nebraska Dep't of Natural Resources, No. S-16-1037 (Dec. 22, 2017), the Nebraska Supreme Court concluded the Department's notices to Cappel pursuant to an interstate water compact which closed off his land's ability to draw surface water from the Republican River for irrigating his crops was neither a physical nor regulatory taking.

As you might expect, the central takings question which the court addressed was whether Cappel's water allocations were "property." The court held that because the closing notice was made pursuant to the Department's obligations under the compact, "the water rights at issue were not a compensable property interest and the Cappels' physical taking argument must fail." Slip op. at 454. The court also dispensed with the regulatory takings claim by applying the Penn Central test. And you know what that means.

Here's the money quote, which reveals the court's essential problem with the takings claims: "the regulation in the instant case did not directly affect private property, but, rather, the use of a public resource. Water in Nebraska is a public resource dedicated for certain uses." Slip op. at 456. In other words, the ability to take and use water is not a private right, but a burden on a public resource.

December 11, 2017

This photo of the view from the lectern at the start of the day proves we really were in the room and not distracted by all the distractions possible in Las Vegas

Here are the materials and cases which I spoke about earlier today at the CLE International Eminent Domain Conference in Las Vegas. I had the lead off session on updates, and my talk focused on cases that I didn't cover in the written materials:

As the title might indicate, it's a case involving the state-run lottery and video lottery machines. If we're reading the details right, the lottery issued permits to the plaintiffs, after which they were instructed to use a different software program, and informed that using any other software would render their machines illegal. The amusement companies were not prepared to retool (they'd have to buy new machines, they alleged), and brought regulatory takings, due process, and civil conspiracy claims.

The trial court refused to dismiss the complaint, concluding that damages for the takings and due process claims could not be limited to the lottery's insurance policy limits, and that the lottery had waived its sovereign immunity on the conspiracy claim.

The West Virginia Supreme Court reversed the sovereign immunity holding regarding the conspiracy claim, but agreed with the trial court that the takings claim should proceed. The court concluded that that the way a property owner raises these type of claims is through a mandamus action to compel the government to institute condemnation.

It's a long opinion with a pretty vociferous dissent, and we won't go through the entire thing, but instead will focus on the takings stuff. The court first articulated the essence of the takings claim:

In Count I, the Permit Holders allege that the State Lottery had previously assured that the ICIS protocol would be functional for the full ten-year permit period. Further, the Permit Holders allege the State Lottery’s requirement that all LVL terminals be converted to the SAS protocol at the cost of the Permit Holders amounted to a taking under both the West Virginia and United States Constitutions because the failure to convert to the SAS protocol would render their LVL terminals economically useless and would even subject them to criminal penalties for continued possession.

Slip op. at 12. The court noted this was a taking of personal property and not real property, but that this doesn't take it outside of the takings clause. Slip op. at 14 ("Discussing personal property we have observed, '[l]ong ago, this Court acknowledged that [the constitutional prohibition on takings without just compensation] ‘protects private property in personalty as fully as in real estate.'' This conclusion is consistent with the view held by the Supreme Court as to the broad definition of what constitutes an interest in property." (footnotes omitted).

Having crossed that bridge, the court next dealt with the procedural question of how these issues get raised. Inverse condemnation is the way to go, and in West Virginia, that means you bring an action to compel condemnation:

Nevertheless, consistent with the United States Supreme Court’s broad interpretation of “property” for eminent domain purposes and the leanings implicit in our precedent, we find that the procedures outlined for eminent domain and inverse condemnation may be applied in this case where the Permit Holders seek just compensation for what they allege is a regulatory taking of their personal property.

Slip op. at 17-18 (footnotes omitted). Responding to the lottery's argument that the West Virginia Constitution contains a provision which says that the State "shall never be made a defendant in any court of law or equity" (i.e., sovereign immunity), the court concluded that it was common under West Virginia law to use the mandamus process for inverse condemnation claims involving land, and there was no reason to not apply that same process to claims involving personal property. And you don't have to formally file a writ proceeding (which were abolished in WVA back in the day). As long as the plaintiff seeks the right remedy compelling the government to institute condemnation, they'll be okay, even if the plaintiffs here sought just compensation. The solution to that problem is to allow the plaintiffs to amend their complaint to seek the right remedy.

Ultimately, the court left the merits question -- did the lottery take the plaintiffs' personal property -- for another day:

We wish to make clear, however, that whether the State Lottery’s mandate compromised a property interest such that it amounted to a regulatory taking for which just compensation is required is not currently before this Court. Moreover, in issuing our new syllabus point recognizing the availability of eminent domain proceedings for a personal property taking, we make no judgment regarding whether the Permit Holders have asserted a viable cause of action in that regard.

Slip op. at 24.

The court treated the due process claims somewhat similarly. It held that if the plaintiffs sought invalidation of the regulation, there's no sovereign immunity because the State's purse isn't going to be affected. But here, the plaintiffs sought money damages for due process violations, which the court characterized as a "constitutional tort" [sidebar: we understand where that term came from, but we dislike it nonetheless]. Thus, the court concluded that to the extent that the plaintiffs' due process claims seek recovery beyond the amount of the State's insurance coverage, the State is immune from payment of the excess, because that would impact the State's money (and not the insurer's).

As we noted above, one Justice didn't agree with the court's takings analysis because takings is just for land and not personal property. He filed what in our opinion is a wrong (but fun-to-read) dissenting opinion that begins this way:

This was a simple case that the majority has transformed into a fiscal nightmare for the State treasury and its taxpayers. In this proceeding, the circuit court ruled that the plaintiffs did not have to limit their “takings” claim for relief to the insurance policy limits provided by the Lottery Commission. The circuit court found that, because the plaintiffs’ theory of liability was grounded on the Takings Clause of the State Constitution, the plaintiffs are entitled to receive whatever amount of compensation a jury decides to award them. The majority opinion not only agreed with the circuit court, but it went where no judicial opinion of this Court has ever gone in the history of this State! That is, the majority of the Court has now ruled that all claims against the State for injury to personal property unrelated to real estate must be litigated as an eminent domain proceeding under W. Va. Code § 54-2-1 et seq. Such a decision is fiscally irresponsible because it extends the concept of condemnation to arenas where no one could have fathomed it would ever apply and will undoubtedly be financially devastating to this State. For the reasons set out, I firmly dissent.1

Dissent at 1-2.

Eminent domain and inverse condemnation are limited to real property, he concluded. To emphasize his point, the Justice noted: "The majority opinion resolved two other issues that pale in comparison to the profoundly catastrophic eminent domain ruling."

Take that!

We thought the U.S. Supreme Court settled this issue in Koontz and Horne. Or are we missing something?

No true Scotsman is a kind of informal fallacy in which one attempts to protect a universal generalization from counterexamples by changing the definition in an ad hoc fashion to exclude the counterexample. Rather than denying the counterexample or rejecting the original claim, this fallacy modifies the subject of the assertion to exclude the specific case or others like it by rhetoric, without reference to any specific objective rule ("no true Scotsman would do such a thing"; i.e., those who perform that action are not part of our group and thus criticism of that action is not criticism of the group).

(And, in case you were wondering, "For the practice of wearing a kilt without undergarments, see True Scotsman.")

Back to our case. In Diversified Holdings, the court considered two aspects of a property owner's challenge to the city's refusal to rezone vacant land from commercial zoning to allow for multifamily use, one procedural, one substantive. The owner challenged the refusal, calling it an "inverse condemnation" claim, arguing it was "unlawful, irrational, a manifest abuse of discretion, a taking of property, unconstitutional, null, and void." Slip op. at 3.

The trial court determined that keeping the property zoned commercial resulted in a substantial decrease in value: as commercial it was worth between $600,000 and $1.5 million; as multifamily, the fair market value was nearly $6 million. But the court also concluded that the refusal to rezone was a valid exercise of the city's police power, and was not unreasonable. The owner filed both a direct appeal, and employing a belt-and-suspenders approach, also filed a discretionary appeal (which is required under Georgia law for "zoning cases").

The first issue the supreme court considered was procedural: was this a "zoning action" which should be challenged via a discretionary appeal? The court concluded that yes, it is. The council made an administrative decision regarding specific property, and was "adjudicatory in nature." Thus, the court concluded, this was a matter that gets reviewed by discretionary appeal:

Accordingly, and without addressing whether an appeal from a true inverse condemnation proceeding would require a discretionary application, we conclude that the present appeal, which is from a superior court order affirming a local zoning board’s decision that the zoning regulations applied to a particular piece of property are not unlawful, is the type of individualized determination that remains subject to the application procedure set out in OCGA § 5-6-35 (a) (1).

Slip op. at 17. Georgia land use practitioners, take note.

Note that the court didn't conclude this challenge was a "true" inverse condemnation claim, and indeed, the next pages of the opinion (starting at page 18 of the slip opinion) is what takings mavens really want to read. There, the court walked through the theory of inverse condemnation and the regulatory takings doctrine, and how those claims mesh (or don't) with government's eminent domain and police powers.

The court finally gets around on page 25 to Lingle, and that case's holding that challenges to the validity of the government's action are not really "takings" cases, but sound in due process:

As the Lingle Court explained, “the ‘substantially advances’ inquiry reveals nothing about the magnitude or character of the burden a particular regulation imposes on private property rights. Nor does it provide any information about how any regulatory burden is distributed among property owners.” Id. at 542 (emphasis in original). In other words, rather than advancing an understanding of whether the effect of a regulation is “functionally comparable to a government appropriation or invasion of private property,” this test evaluates a regulatory policy to determine whether its ends are sufficient to justify the means. Id. And that type of substantive inquiry “is tethered neither to the text of the Takings Clause nor to the basic justification for allowing regulatory actions to be challenged under the Clause.” Id.

The court concluded, "[u]nder a true takings challenge, we recognized, “the focus of the takings analysis is on whether the government takes property, not on whether the government has a good or bad reason for its action." Slip op. at 27. In other words, "substantially advances" is a due process test under Georgia law as well as the Fifth Amendment. Besides, "zoning is unlikely to be a fertile grounds for inverse condemnation claims," slip op. at 28, because [z]oning, in short, does not ordinarily present the kind of affirmative public use at the expense of the property owner that effects a taking, and we have previously recognized as much." Id. at 29. The court concluded that because the relief Diversified requested was a rezoning to multifamily (and not damages), its claim was really a due process claim despite its inverse condemnation label.

At that point in the opinion, it was all over but the shouting. The trial court, as we noted above, had concluded that the city's refusal to rezone was a reasonable exercise of its police power. And the supreme court agreed that the refusal did not violate the low "arbitrary and capricious" standard, and thus affirmed.

Well worth a read, if only to understand how lower courts view and are applying Lingle and the U.S. Supreme Court's takings cases.

September 5, 2017

What do takings mavens think about when they hear "New York City" and "takings?" Probably the granddaddy case of them all, Penn Central. Or maybe Courtesy Sandwich Shop, or Loretto. All good ones, landmarks.

But this post isn't about a visit to the sites of those cases (not to worry, we'll get to Grand Central soon), or even about a matter that ended up in the official reports, but about a New York eminent domain story that has been more lost to time, and which is now being rediscovered and recognized. It's a visit to Seneca Village.

You wouldn't know it today, but just inside the boundary of what is now Central Park, right near the West 85th Street entrance, once was "the largest community of free African-American property owners in antebellum New York." Beginning in 1825, this locale was home to up to 250 residents in 70 houses, and, according to Central Park's website:

The village was built in a desirable location, with proximity to the Hudson River’s ample fishing opportunities and to a natural source of clean water at a nearby spring. The village’s residences ranged from one-room homes to three-story dwellings made of wood and brick, and there are records of three churches and one school in the village as well. The 1855 census indicated that Seneca Village was home to approximately 250 residents and contained 70 houses. Life in Seneca Village was rural and its distance from the bustling streets of Lower Manhattan offered its residents a peaceful life.

Property ownership in Seneca Village provided an important gateway into democracy for African-American men. In 1821, New York State decreed that African-American men were required to possess $250 in property holdings and prove three years of residency in the state in order to be eligible to vote. Many residents became eligible to vote through land ownership in Seneca Village, including a cooper (barrel maker) named James Hinson. Census data shows that his property, including two lots of land and a two-story residence with an attached shed, was valued at $550. (Hinson had originally purchased his property for $325.)

But life in Seneca Park was not to remain idyllic.

Because "[b]eginning in 1849, a small group of civic-minded New York visionaries began to agitate for the creation of a grand, artfully sculptured uptown park, modeled after the opulent public parks of Europe. They would eventually include James William Beekman, a State Senator; William Cullen Bryant, editor of the New York Evening Post; Andrew Jackson Downing, a landscape gardener and writer; Robert Minturn, a wealthy merchant; and Fernando Wood, the Mayor."

When civic-minded civic leaders get together, you know what that means: someone's property is likely up for grabs. Central Park was in, and Seneca Village had to go. Since the land was privately owned, you also know what that meant: eminent domain.

Like many eminent domain tales, it wasn't a pretty one. In a familiar twist, the area was declared blighted, and the residents a nuisance: "As the campaign to create Central Park moved forward park advocates and the media began to describe Seneca Village and other communities in this area as 'shantytowns' and the residents there as 'squatters'."

As Columbia University's web site about the Village notes, "[w]ithin two years, Seneca Village would be razed and its identity erased by the creation of Central Park."

Today, there's not much of anything on the surface left of Seneca Village. As noted, Columbia has undertaken an archaeological dig at the site, and the city has erected a small plaque at the site. Not many people, we observed, took the time to read the sign on the day of our visit. But that may have been because it was a warm summer's day and no one except takings nerds were all that interested in historical details. The nearby water fountain received more attention.

In addition to acknowledging the early history of Seneca Village, the sign also relates how "eminent domain" (why the unnecessary quotation marks, we can't say) was used to dispossess the owners of their property to make way for the Park:

In 1853, the state legislature authorized the use of "eminent domain," the taking of private property for public purpose. This unprecedented public acquisition of private land to create a major public park in the City of New York began in 1856, and at the time encompassed the land from 59th to 106th Streets between Fifth and Eighth Avenues. In 1863, additional parkland was annexed to include the area between 106th and 110th Streets. Those owners living within the boundaries of the proposed park were compensated for their property, though many protests were filed in New York State Supreme Court, as is often the case with eminent domain, when owners contest the amount of settlement. In view of recent research, it appears that residents and institutions of Seneca Village did not re-establish their community in another location.

In total, approximately 1600 people who owned, lived and/or worked on the 843-acre tract of land had to move when the Park was created.

Check out these resources to find out more, or if you are in the city, the Parks & Rec Dept offer occasional tours:

July 31, 2017

The Connecticut Appeals Court's opinion in Stones Trail, LLC v. Town of Weston, No. AC 38078 (July 18, 2017), does not offer a lot in terms of substance -- it holds that a property owner's regulatory takings claim based on the Town's approval of what the owner thought was a subdivision was not ripe because the owner had not actually filed a subdivision request -- but the facts are interesting nonetheless:

The plaintiff had purchased the property with the purpose of dividing it into six buildable lots. Before the closing of the purchase, the plaintiff submitted three maps of the property to the town. The town’s attorney determined that the property depicted on one of the maps was not a subdivision, and that map was stamped accordingly and filed in the town land records. Thereafter, the other two maps, which altered the lot lines of the property to depict six potentially developable lots, were stamped with the identical language and filed in the land records. The plaintiff completed the purchase of the property, in reliance on the review of the lots by town officials and the stamped notation. The plaintiff did not seek or obtain approval from the town’s Planning and Zoning Commission for the subdivision of the lots, believing that such approval was not necessary because the town’s prior procedure had been to place the same stamped language on maps when it was determined that subdivision approval was not needed. Thereafter, the plaintiff was informed by several town officials that it had to seek subdivision approval from the commission prior to subdividing the properties. The town’s attorneys rejected the plaintiff’s requests to reconsider that determination and urged the plaintiff to apply to the commission for subdivision approval. The town’s zoning enforcement officer also denied the plaintiff’s request for a certificate of zoning compliance, which was upheld by the town’s Zoning Board of Appeals. Prior to trial, the town filed four motions to dismiss the plaintiff’s action on the ground that its claims were not ripe and that the court therefore lacked subject matter jurisdiction. Those motions were denied. The jury returned a verdict in the plaintiff’s favor on its constitutional claims, after which the trial court, sua sponte, set aside the verdict and dismissed the action for lack of subject matter jurisdiction.

We're not sure where we are on this one. On one hand, finding a case not ripe and dismissing for lack of jurisdiction after the court's rejection of the argument on four previous occasions over nine years of litigation, and allowing this case to go to trial, seems unfair, wasteful, and to cut in favor of the owner. Those stamped maps which showed the property as subdivided sure seem like the kind of things a buyer should be able to rely on. But, on the other hand, it does appear (at least in the court's retelling of the story, which may be slanted), that the owner did plow forward even though the Town and its officials were telling the owner that it really didn't have subdivided property.

But we also know what courts do when they feel that a citizen has the government painted into a corner by the law: they find a way to unpaint the corner. We don't know who is right, but we do know what we would have counseled a client if she found herself in this situation.

So it did what local government do when they think they have a problem, it passed a law. That law, Ordinance 12-12-20-001, required owners of all cemeteries, public or private, to maintain them. The ordinance also contained two troublesome provisions. First, it requires the owners of the cemeteries to keep them open to the public during the day. Second, it allows the Township's code inspectors to enter "any property" to inspect and see if it is in compliance with the ordinance.

Under the authority of the ordinance, a code inspector came on Knick's property without a warrant, and told her "guess what, these stones are actually grave markers, and you better clean up this cemetery." Knick's response was "what cemetery? My land doesn't have a cemetery on it." Not buying it, the inspector wrote her up for violating the ordinance.

Knick sued in state court, seeking to enjoin the enforcement action. The Towship withdrew the notice of violation and the parties agreed to stay enforcement actions. But Knick didn't file an inverse condemnation action, or include a claim for compensation in her state court challenge.

After the Township issued a second notice of violation of the ordinance, and the state court denied Knick's request for a contempt order, she sued in federal court, asserting a violation of her Fourth Amendment rights against warrantless searches, and her Fifth and Fourteenth Amendment rights to due process and just compensation. After some back and forth on the contents of the pleadings, the District Court dismissed the action because Knick had not exhausted her state law remedies.

The court concluded that Knick lacked Article III standing to assert a facial Fourth Amendment search-and-seizure claim because she did not appeal the District Court's ruling that the ordinance, as applied to her, was lawful because the search was of an open field, and thus not protected. She thus "accepted the District Court's conclusion that her Fourth Amendment rights were not violated." Slip op. at 11. Thus, even if she was injured by the inspector's actions, her rights were not violated, because even if a court were to enjoin the Township from enforcing the ordinance in an unconstitutional manner, it could still search an open field. In short, the Township could search an open field even without the ordinance.

Although the opinion "recognize[d] that the Ordinance's inspection provision 'is constitutionally suspect and we encourage the [Township] to abandon it (or, at least, to modify it substantially)," the court held that it needed a plaintiff with standing in order to consider the argument.

Knick fared no better with her claim for just compensation, because -- you guessed right -- Williamson County. As noted earlier, she had not sought compensation via available Pennsylvania law avenues. The court rejected each of her three arguments that she didn't need to pursue just comp in Pennsylvania courts.

First, it concluded that a facial takings claim isn't exempt from the available state procedures prong of Williamson County. The Third Circuit has already held otherwise, in County Concrete Corp. v. Town of Roxbury, 442 F.3d 159 (3d Cir. 2006), and "[w]e cannot overrule our own precedent." Slip op. at 23. If you want to try and understand the difference between a "facial" challenge, an "as-applied" challenge, and a "facial taking," at least in the Third Circuit's view, take a read of pages 24-27. We don't think the court's reasoning is entirely convincing.

Second, the court rejected Knick's argument that her earlier state court lawsuit was enough. This wasn't a claim for just compensation, only for injunctive relief, so she has not been denied compensation by the state, yet.

Finally, the court declined to exercise its prudential discretion and not apply Williamson County. Yes, it is an optional doctrine, but the facts here do not suggest that it would be unfair to require her to go back to state court and try and get compensated. The court distinguished decisions from other circuits which declined to apply Williamson County, concluding that "there is 'value in forcing a second trip' to state court here." Slip op. at 35.

More on the case here ("Challenge to Law Opening Private Cemeteries to Public Fails") from the Legal Intelligencer. Note that the owner's counsel says this case is going up the food chain to the Supreme Court ("'We are disappointed but will go to the Supreme Court for justice,' he said in an email Thursday.). So stay tuned.

June 8, 2017

You heard that right. After the Michigan Court of Appeals' recent ruling in Lanzi v. Township of St. Clair, No. 329795 (May 23, 2017), you should consider skipping the usual Williamson County step of filing your federal takings claims in state court.

In that case, property owners sued the township after the township's sewage system broke down and backed up grey water into the plaintiffs' basement. They brought a complaint in Michigan state court alleging both negligence and a physical invasion taking. The township alleged it was immune by statute from such suits. The trial court rejected the argument and the township appealed.

The court of appeals reversed on the negligence claim, agreeing with the township that it was immune because it had taken reasonable steps to repair any defects in the sewer system. We'll let you read that part of the opinion if you're interested.

What got us thinking about Williamson County and state-vs-federal court for takings claims starts on page 6 of the slip opinion. The court held that in Michigan, "no damage remedy exists for claims against a municipality, or government employee, for a violation of the Michigan Constitution when an alternative remedy exists." Slip op. at 6 (citing Jones v Powell, 612 N.W.2d 42 (Mich. 2000)). And the Lanzis' takings claim not only alleges a violation of the Michigan Constitution, it also is a taking under the Fifth Amendment.

And here's where the opinion gets a bit weird:

Accordingly, because plaintiffs have an alternative avenue for relief, namely a claim under 42 USC 1983, they cannot sustain a claim for monetary damages against defendant, a municipality, for a violation of the Michigan Constitution. Jones, 462 Mich 329. Thus, pursuant to MCR 2.116(C)(8), the trial court should have granted defendant’s motion for summary disposition as it related to plaintiffs’ takings claim. Accordingly, we reverse the trial court on the takings claim.

Slip op. at 6-7. In other words, you have no claim under Michigan law for a state taking, because you have a federal takings claim.

Williamson County requires that you first pursue available state remedies to recover compensation in state court, before you can raise your federal takings claim in federal court. But what Lanzi concluded is that you can't go to a Michigan court with a state law takings claim because -- get this -- you have a remedy in federal court.

A somewhat circular argument, but we can dig it, because the end result tells us that, having the door to the state courthouse slammed in your face, takings plaintiff, in Michigan you can now go directly to "Go" and file in federal court. When the defendant invariably raises Williamson County ripeness as a way to get you tossed, hand the court a copy of Lanzi (and Jones).

May 16, 2017

Today's linked story is more land-usey than eminent domain-ey, but still interesting for you condemnation lawyers on the line (besides, condemnation lawyers really do have to know land use law, don't they?).

Honolulu can is a tough place to be, with our status as one of the most expensive places in the world to live, and the high cost of housing is one of the prime reasons for that. In Honolulu Civil Beat, Stewart Yerton has a story on the legal risks triggered when a City Council member suggested that the council might deny development permits if the permitted condos were sold to Chinese nationals instead of local residents.

The property owner brought its claim in Maryland state court claiming, among other things, that the County's two indefinite moratoria on development and sewer availability -- which prohibited owners from seeking or obtaining County subdivision -- was a facial taking. The lawsuit asserted "the moratorium is facially unconstitutional," although it's not clear from the majority opinion what remedy the complaint sought.

The County removed the case to federal court and moved to dismiss. The district court granted the motion, because "[i]t is beyond the province and competence of this court to make zoning decisions[.]"

The Fourth Circuit reversed. "Count I is a facial challenge to the moratoriums and is thus clearly ripe." Slip op. at 7. Because a facial challenge is one that claims that the very adoption of the law results in a constitutional violation, the takings claim was ripe. "When an ordinance on its face is alleged to have effected a taking, as in Count I, the claim accrues when the ordinance interferes in a clear, concrete fashion with the property's primary use." Slip op. at 7. "Clayland Farm suffered concrete and certain injury as soon as the moratoriums were enacted; the ordinances prohibit Clayland Farm from subdividing more than one additional lot from its property and from developing more than one dwelling unit on the lot, which had previously been allowed." Slip op. at 8.

The court also held that the procedural due process, § 1983, and state law claims were also ripe. In other words, a big win for the property owner.

But it was not without dissent. One judge agreed with all but the takings claim, which he argued was not ripe because the remedy which the complaint seeks is just compensation, and Williamson County require the plaintiff to seek that remedy in state court. The dissent argued that "a facial taking claim seeking just compensation for a valid taking -- as opposed to a facial claim challenging the validity of a taking -- is [not] excused from the exhaustion requirement." Slip op at 13 (Floyd, J., dissenting) (emphasis original). Since the plaintiff here sought just compensation, its claim was not ripe in federal court.

But this argument overlooks the fact that the plaintiff did bring the case in state court, and it was the County which removed the case to federal court and then moved to dismiss for lack of ripeness. See slip op. at 6. See also Sansotta v. Town of Nags Head, 724 F.3d 533, (4th Cir. 2013). Addressing that "waiver" issue, the dissent argued that "[t]he complaint in this case, however, falls outside the scope of Sansotta's waiver reasoning. It alleges no state inverse condemnation claim, and is thus not the type of joint suit authorized by San Remo."

Whereas the plaintiff in Sansotta alleged a state inverse condemnation claim that could have obviated the need for a court (federal or state) to reach its federal just compensation claim, Clayland Farm failed to do so. Thus, Clayland Farm’s federal just compensation claim is just as unripe in federal court as it was in state court, and so Clayland Farm should not be entitled to a waiver defense.

Dissent at 16. Judge Floyd, however, agreed with the majority that Count I would be ripe cast as a public use challenge. Id. at 16 ("I agree with the majority that the alternative claim in Count I -- a public use claim contesting the alleged taking's facial validity -- is ripe."). No amount of state compensation can "cure" the lack of a public use, so property owners can bring their claims in federal court.

This is an unpublished opinion and dissent, so we're not going to spend a lot of time to try and wrap our heads around the dissenting judge's analysis, but suffice it to say this:

When the government removes the case to federal court, it shouldn't get any traction with an argument based on the notion that the claim should not have been brought in federal court and thus isn't ripe -- the law may be an ass sometimes, but it's not so nuts as to accept an argument that would make Leo Rosten blush.

We thought in San Remo, the Supreme Court effectively held that the elements of a state and a federal takings claim were the same (hence, issue preclusion prevents "relitigation" of losing state takings claims later in federal court), not that there's some kind of "joint suit" requirement that a takings plaintiff assert both claims in state court.

This is the "big one," our annual 3-day festival of all things eminent domain, property, takings, inverse condemnation, and just compensation. Truly national in scope, this is the 34th annual edition, and the one conference you must attend. Our 2016 conference in Austin was one of the best in years, and we're on the way to replicating it in 2017, with a great venue in an exciting city.

Look for the web and printed brochures to show up in your mailboxes, but in the meantime, here are some of the highlights (we'll post more in the next few days):

Relocation, relocation, relocation: we are featuring two sessions on this important and growing area of law. Our first panel will address the tension between condemnors, property owners, and tenants in securing relocation benefits, and our second will be a case study of an appeal under the Uniform Relocation Act, complete with lessons learned and traps for the unwary. Featuring a slate of experts: David Arnold (Virginia), Janet Handy Bush (Maryland), Kenneth Gindy (Texas), Brian Kunze (Virginia), Jill Gelineau (Oregon), Kelly Walsh (Washington), and Martyn Daniel (Washington).

Present and Future Highway Projects: we have several panels on issues related to present and planned highways and other transportation projects. We'll focus on the issues that arise when a highway authority plans to take property but doesn't do so immediately -- where are the lines between planning and taking in those cases? Strategies for property owners in obtaining information from the highway department under public records laws, and the role of federal funding in these and similar cases. Featuring Linde Hurst Webb (Ohio), Matthew Bryant (North Carolina), W. Andrew Gowder (South Carolina), Minming Wu (from the Federal Transit Administration (invited)), and Mark Murakami (Hawaii).

Trial and practice insights: we have several panels devoted to the latest strategies from condemnation jury trial experts: how to use experts (appraisers and others) to make your case; how to employ a jury consultant to maximize your results; winning valuation evidentiary issues before and during trial; admitting or excluding the "lowball" offer; and maximizing the property owner's testimony in the just comp phase. With Jeremy Hopkins (Virginia), Mary Nell Bennett (Louisiana), Christian Torgrimson (Georgia), Darius Dynkowski (Michigan and Ohio), Andrew Brigham (Florida), Scott Jenny (California), Justin Hodge (Texas), and Susan MacPherson (Minnesota)

Inverse and regulatory takings: It's been 25 years since the Supreme Court blockbuster Lucas -- has the sky fallen? With Dwight Merriam (Connecticut), and Luke Wake (California and DC). Where the line is between an exercise of the police power to protect the public, and a taking is something we've been trying to figure out for nearly a century since Pennsylvania Coal. David Breemer (California) and I (Hawaii) will bring you the latest.

There's a lot more, of course, Reserve your space by registering for the conference here.

Also, here are links to the cases which our Toronto colleague Shane Rayman referred to in his afternoon presentation on lessons for U.S. lawyers from Canada's law of injurious affection:

Antrim Trucking - the Supreme Court of Canada case (won by Shane) in which the court upheld injurious affection for the business damages resulting from a highway project, even for an owner whose property was not physically expropriated.

August 4, 2016

The issue resolved by the Minnesota Supreme Court in Zweber v. Credit River Township, No. A14-0893 (July 27, 2016) was one that land use lawyers deal with constantly: when an administrative agency is alleged to have violated someone's constitutional rights, what procedural route must the legal challenge take -- is the plaintiff required to go to court via administrative channels, or can she initiate an original jurisdiction ("de novo") case?

In Zweber, the court came down on the side of original jurisdiction. There, Zweber owned undeveloped land which he wanted to develop, and he submitted a preliminary subdivision plat to divide it up. After a neighbor objected for the usual reasons (traffic), the County approved the plat application. But Zweber didn't begin development and instead, a couple of years later applied for a new subdivision. "This time, based on the recommendation of the Planning Commission, the County Board denied the application." Zweber challenged the denial up through the administrative appeals process, which in Minnesota meant that he sought a writ (of certiorari) in the Minnesota Court of Appeals.That court reversed and ordered the County to approve the application.

But the County did nothing. After two years of inaction, Zweber brought an original jurisdiction action in the District Court, Minnesota's court of general jurisdiction, seeking damages for a taking, for violating his equal protection rights, and for violating his civil rights (42 U.S.C. § 1983). The County sought dismissal because Zweber was required to have brought his claims in the Court of Appeals via a writ proceeding, and thus the District Court lacked subject matter jurisdiction.

The District Court disagreed and concluded it had jurisdiction, but the Court of Appeals reversed, "reasoning that the County's 'plat approval subject to conditions is a quasi-judicial action, which is reviewable only by certiorari appeal within 60 days,' and that Zweber's 'constitutional claims are not separate and distinct from that action.'"

The Supreme Court held that property owners like Zweber who allege constitutional violations are not obligated to pursue those claims via administrative channels. District Courts are courts of general jurisdiction, and have authority to hear all civil and criminal cases, including those which allege federal claims under section 1983. Yes, review of certain local government actions are by way of certiorari in the Court of Appeals when those actions can be characterized as "quasi-judicial" and the plaintiff challenges their validity, but here it was kind of a mixed bag, and there was "overlap" between Zweber's claims challenging the County's decision, and his constitutional claims.

Here, because "[t]he takings claim does not require an examination into the validity of the County's decisions because it assumes their validity," Zweber was not required to pursue in by certiorari. He "presuppos[ed] that the conditions placed on his plat application were valid, but alleges that they 'constitute[d] a taking [for] which [he] must be compensated." Slip op. at 13. Same analysis for the equal protection claim, because Zweber did not seek reversal of the County's denial, only money damages for the constitutional wrongs of treating him differently than other applicants.

The court rejected the County's argument that Zweber should have been required to split his claim and pursue each in separate forums:

The County nevertheless raises a public-policy objection to allowing Zweber’s claims to proceed. The County complains that dividing the review of quasi-judicial decisions and the adjudication of any derivative claims unnecessarily subjects local governmental entities to expanded liability and protracted proceedings. The County instead suggests that the better procedure would have been for Zweber to have first argued in a petition for a writ of certiorari that the conditions placed on approval of his plat were unconstitutional, and then, if the court of appeals had accepted his argument, subsequently pursued a takings claim in district court. However, nothing in Minn. Stat. § 606.01, nor in our case law, suggests that such an approach is required.

In this article, Dean Saxer examines the Supreme Court’s decision in Koontz v. St. Johns River Water Management District. In that land use case, the Court held that proposed local government monetary exactions from property owners to permit land development were subject to the same heightened scrutiny test as imposed physical exactions. The Court left unanswered the question of how broadly this heightened scrutiny should be applied to other monetary obligations imposed by the government. Saxer argues that “in lieu” exactions that are individually assessed as part of the permitting process should be treated differently than the impact fees that are developed through the legislative process and are applied equally to all developers without regarding to a specific project. Accordingly, Koontz’s application should be limited to “the special context of land-use exactions” rather than be extended to all regulatory monetary obligations.

Saxer begins by identifying the various levels of scrutiny applied to land use decisions and shows how these levels are designed to prevent the abuse of power, particularly when actions are exercised at the individualized level. She concludes by suggesting that exactions that result in a permanent physical occupation of real property should be subject to heightened scrutiny. However, only administrative, individualized, monetary exactions, designed to replace a physical exaction, such as the kind involved in Koontz, should be subject to heightened scrutiny to control the potential for abuse. Legislatively-determined monetary conditions such as impact fees, but not taxes, should be subject to review under state law standards, which range from a reasonableness test to more stringent tests under statutory or judicial determinations. In the absence of a state standard of review, legislatively-enacted impact fees challenged in federal court should be analyzed under the standard rational basis test for land use regulation.

While we may not agree with a lot of what she writes, we think this article is well done and worth a read. Download it here.

May 30, 2016

Programming note: On the day we remember our nation's war dead, we thought we'd repost this one, about how Arlington National Cemetery came to be, and how yes, there's a takings story there.

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You know how we're always saying that the provisions in the Takings Clause are "self-executing," that even in the absence of a waiver of sovereign immunity, the Tucker Act, and section 1983, property owners would still be able to maintain a claim for compensation? Well here's an article that explains that how that rule was first articulated, and not in a dry academic way, but with a fascinating historical story.

It's the tale of United States v. Lee, 106 U.S. 196 (1882). We knew the land that is now Arlington National Cemetery was once owned by Robert E. Lee, but we can't say that we gave much thought to how it became public property. We always assumed that it had simply been seized as war booty from Lee during the Civil War, and that was that.

In May 1861, the United States Army seized the Virginia home of Confederate General Robert E. Lee and his wife, Mary Lee. During the Civil War, the Lincoln Administration converted the estate into a refugee camp for runaway slaves and a military cemetery, a burial ground that is known today as Arlington National Cemetery. In December 1882, seventeen years after Lee surrendered at Appomattox, the United States Supreme Court ruled that the federal government had unlawfully seized the Arlington estate without paying just compensation to the Lee family. It further held that the doctrine of sovereign immunity did not bar the Lees from bringing suit to vindicate their legal title to the property. In the aftermath of the Supreme Court’s ruling, Congress reached a settlement agreement with the Lee family. Arlington National Cemetery has remained the lawful property of the United States ever since. The Supreme Court’s ruling in United States v. Lee made clear that the Constitution is not suspended in wartime. At all times, legal and constitutional limits govern the exercise of official power. This article tells the story of United States v. Lee and places the case in historical context.

This article is an excerpt from the book The Last Battle of the Civil War: United States Versus Lee, 1861-1883 (2011), available here, and here (e-book). Highly recommended.

We won't go into the details because our colleagues cover them pretty well, but wanted to point this one thing out. The issue in the case was whether the city could be held liable under RLUIPA's "equal terms" provision (which requires local governments to impose land use regulations on religious and nonreligious users on an equal basis), after it refused to allow a religious school to rezone property in an economic development zone to allow the school.

The school didn't conform to the area master plan, which allowed only uses which would increase the government's tax revenue (that's some plan, no?). We want commercial uses and offices, not your school.

RLUIPA suit followed. District court granted the city summary judgment. The Sixth Circuit reversed, setting out a test (sort of) for determining when a municipality is applying its purportedly neutral land use regulations in an unequal manner.

So far, so good. We like clarity in the law; more so when it adds to a circuit split.

But here's what caught our eye, this bit of legal advice from the court of appeals about how the city could avoid all that RLUIPA mess:

Finally, we observe that the government could ensure commercial use of the property at issue without violating the federal statute. Using eminent domain, Upper Arlington could force TOL Christian Schools to sell the land to the government, and sell the land to a buyer that the government thinks offers superior economic benefits.

[T]he city has not committed government funds to the theory that a traditional commercial office tenant—as yet unidentified—both could be attracted to use the land and also, if attracted, would increase tax revenues. Instead, they have placed the cost on TOL Christian Schools—perhaps to save the upfront cost of compensating an exercise of eminent domain, perhaps because there is no market for office space in Upper Arlington, and perhaps to exclude an unfamiliar or disfavored religious assembly.

Id.

But why should a lack of commitment of funds, an identified new owner, or the lack of a market stop the city? Under Kelo, that stuff is just analytical dross. And indeed, having those elements in your hip pocket, city, would seem to cut against public use and in favor of a pretext claim.

March 31, 2016

Here's a new cert petition, seeking SCOTUS review of an unpublished opinionfrom the Eleventh Circuit. That court concluded that Dibbs' equal protection challenge to the Hillsborough County's Community Plan failed because he could not identify others who were similarly situated but treated differently.

Dibbs asserted. among other claims, that the County treated him differently from others when it rejected his development proposals as inconsistent with the Community Plan for three parcels he owned. Motivated by malice, he asserted, the County singled him out for ill treatment because of "vindictiveness, maliciousness, animosity, spite or other reasons unrelated to a legitimate government interest."

Dibbs isn't part of a protected class, so this is an Olech class-of-one claim in which he must show that he was treated differently from others similarly situated, and that the County "applied a facially neutral ordinance for the purpose of discriminating." The district court and the Eleventh Circuit had a problem with the first part of that test, because Dibbs did not identify other landowners subject to the Community Plan who were treated differently. Dibbs argues that he did point out other landowners who were afforded different treatment, and, in any event, the standards should be relaxed somewhat when he introduced substantial evidence that the County had ill intent.

Here are the Questions Presented:

1. Whether the Eleventh Circuit’s decision conflicts with this Court’s decision in Village of Willowbrook v. Olech, 528 U.S. 562 (2000), recognizing class-of-one equal protection claims for landowners, or negates a landowner’s rights under Olech?

3. Whether the Eleventh Circuit’s decision conflicts with decisions of other courts of appeal, including Paterek v. Village of Armada, 801 F.3d 630 (6th Cir. 2015), and Swanson v. City of Cheter, 719 F.3d 780, 784 (7th Cir. 2013), that the “similarly situated” standard should be relaxed where, as here, there is substantial evidence of animosity or vindictiveness between the government and the class-of-one plaintiff?

4. Whether this Court should provide lower federal courts and state courts guidance concerning when class-of-one comparators, landowners or development projects are “similarly situated” in connection with a class-of-one equal protection claim?

Bottom line: the plaintiff's takings claims (Lucas and Penn Central) are going to trial, the balance of the remaining claims (vested rights, etc.) are gone.

This case came about after a property owner -- the developer of the Aina Lea project on the Big Island -- challenged the State Land Use Commission's reclassification of Aina Lea's land, just north of the Waikoloa beach area, from urban to agriculture. The owner also challenged the imposition of an affordable housing requirement. In the words of an order by the court last year, "Plaintiff Bridge Aina Lea, LLC ('Bridge'), the owner of the parcel, claims that, in reclassifying the land, the Commission and certain commissioners violated Bridge's rights under the United States Constitution, the Hawaii Constitution, and various Hawaii laws." Order at 1-2. For more detail on the claims, see this post, "Guest Post: Federal Courts Flashback - Takings And Vested Rights Challenge To Land Use Commission."

The litigation began as two lawsuits originally filed in state court in the Third Circuit. The first was an original jurisdiction civil rights lawsuit against the State Land Use Commission which originally sought, among other things, just compensation for the taking of the right to develop its property. The other case was an administrative appeal under the Administrative Procedures Act from the LUC's decision.

The State removed the civil rights lawsuit to U.S. District Court in Honolulu and promptly moved to dismiss, and this portion of the case nearly caused us to flash back to our Federal Courts class in law school, since it raised a host of procedural questions such as the effect of removal, whether certain defendants are "persons" under 42 U.S.C. § 1983, whether the federal court must have abstained from addressing the federal takings claim, whether there is a state damage remedy for deprivation of constitutional rights, and zoning estoppel under Hawaii law, among others. The federal courts (District and Ninth Circuit) delayed making any decisions pending the outcome of the administrative appeal as it wound it way up through the state court appeals process.

Eventually, the Hawaii Supreme Court held the Commission was wrong when it reverted the land to its previous agricultural classification, but only because it did not comply with the requirements of state law (the Commission did not make specific findings of fact as required by statute). The court also rejected owner's state constitutional claims, and in a footnote, it arguably decided the federal constitutional claims, which had been reserved for the federal lawsuit, when it held the conditions were "valid."

The federal case, which by then was in the Ninth Circuit -- which had held off its decision pending the ruling by the Hawaii Supreme Court -- was sent back to the District Court, which in late 2015 in this order, got rid of most of the federal case. The only claims left unresolved were the property owners claim for just compensation and damages for the temporary taking of its right to develop the property, and a claim for damages for the owner's vested rights claim.

There's a lot going on in the District Court's order granting in part the State's motion for summary judgment:

The owner's Nollan/Dolan/Koontz unconstitutional condition claim is barred because the Hawaii Supreme Court already ruled on that issue in Footnote 17, when it noted that given the "broad authority [provided to the LUC under Hawaii statutes] and Bridge's representations to the LUC, the affordable housing conditions and its included deadline were valid. Bridge cites no authority that would prevent the LUC from imposing benchmarks or deadlines on development schedules." The court didn't address Nollan or Dolan in the footnote, but the owner's briefs had addressed the cases, which means "[t]he Hawaii Supreme Court, therefore, had occasion to consider Bridge's arguments regarding Nollan and Dolan, was ultimately unpersuaded, and, in characterizing the affordable housing condition as "valid," found it constitutional." Slip op. at 12.

But that leaves out the rest of the sentence, in our view: it is pretty clear to us from our reading of Footnote 17 that the Hawaii Supreme Court ruled that the LUC's imposition of the affordable housing condition was "valid" under the 'broad authority" in Haw. Rev. Stat. § 205-4(g), which "gives the LUC broad authority to impose conditions, including those necessary 'to assure substantial compliance with representations made by the petitioner.'"

To us, it's a real stretch to say that the Hawaii Supreme Court decided the constitutionality of the affordable housing condition with this language, and was only deciding the "validity" of the condition in relation to the LUC's statutory authority. Of course, even if the LUC has the authority to do something, it is another matter entirely whether it is constitutional for it to do so. Especially where the issues were raised in a separate lawsuit, and could not have been raised in an administrative appeal, since the LUC does not have the authority to determine whether its enabling statutes are constitutional. So count us as unconvinced.

The District Court also clarified that the unconstitutional conditions doctrine isn't really a takings theory, but one where the government cannot require someone to give up a constitutional right in exchange for a discretionary benefit. In the land use context, these claims look a lot like takings claims because the right that the owner is being asked to surrender is the right to just compensation. But the property owner here made actual takings claims, "based on the LUC's decision to reclassify the property in issue as agricultural," and not on the imposition of an affordable housing condition. Slip op. at 14.

Thus, the owner's claims are truly takings claims -- either a Lucas wipeout, or a Penn Central regulatory taking -- and not unconstitutional conditions claims. And since the State didn't really address these claims in its motion for summary judgment, they're going to trial.

The court also rejected the State's statute of limitations argument, which asserted that the takings claims accrued when the conditions were imposed or the land was classified. The court, however, concluded that the federal taking only ripened (under Williamson County) when the State denied compensation. And that didn't happen until the owner filed its lawsuit. So the claim ripened at the same time.

The court also held that the State of Hawaii's environmental study law, Haw. Rev. Stat. chapter 343 (our EA/EIS requirement) isn't a "background principle" of law that would preclude the owner from having a property interest in a parcel regarding which an EA/EIS has not been conducted. The State had argued that there was no taking for not allowing development because, hey, the owners failed to get an EIS, and that's the reason they couldn't build, not us.

The court concluded that the State did "not carry [its] burden, as they offer no support for their argument that '[t]he requirement of obtaining a valid EIS was a background principle of Hawaii property law.'" Slip op. at 23. The requirement to secure an EIS in not "the type of proscriptive regulation that qualifies as a background principle of state nuisance or property law under Lucas. Notable, Haw. Rev. Stat. § 343-5 is not a prohibition on land use based on principles of nuisance or property law. The statute instead merely requires that an owner seek an assessment of the proposed use's potential environmental impact. Lucas does not automatically preclude a landowner from recovering under a takings claim just because other regulations or requirements must be satisfied." Id.

Finally, the court granted summary judgment to the State on the owner's vested rights claims, which sought damages as a remedy. The court relied on a Hawaii Supreme Court decision, Allen v. City and Cnty of Honolulu, 58 Haw. 432, 571 P.2d 328 (1977), which held that the "builder's remedy" (an injunction) is the only remedy available to a landowner for a vested rights claim. As we've written before (see Arrow of Time: Vested Rights, Zoning Estoppel, and Development Agreements in Hawaii, 27 U. Haw. L. Rev. 17 (2004)), after First English, a state court cannot deny a compensation remedy if it precludes a landowner from making all beneficial use of its property, even if the prohibition is temporary. The District Court concluded that that requirement was satisfied here by the owner's viable federal constitutional takings claims. "[V]ested rights," on the other hand, "support a separate theory under state common law." Slip op.a t 26. Therefore no separate damage remedy for such claims.

So absent a settlement, there's going to be a federal court trial on Lucas and Penn Central takings claims regarding whether the State must pay compensation and damages for the temporary prohibition on the owner's use of the land.

Will we follow along? Great advocates, cutting-edge issues, and a court familiar with the law? You bet we will.

February 8, 2016

Here's the latest on a takings case that is winding its way through the U.S. District Court in Honolulu. Yes, you read that right: a takings case being litigated in federal court.

Intrigued? Read on.

We've covered this case and the related state court litigation several times here before, so this isn't entirely unfamiliar ground. This is a case in which a property owner (the developer of the Aina Lea project on the Big Island, just north of the Waikoloa beach area) filed a case in Hawaii state court seeking, among other things, just compensation for the temporary taking of its right to develop its property. The case ended up in federal court because the State of Hawaii Land Use Commission waived the State's 11th Amendment immunity and removed the case from state court under federal question jurisdiction.

The litigation began as two lawsuits originating in state court in the Third Circuit (Big Island). The first was an original jurisdiction civil rights lawsuit, the other an administrative appeal (that's a writ of administrative mandate for you Californians). The State removed the civil rights lawsuit to U.S. District Court in Honolulu and promptly moved to dismiss, and this portion of the case nearly caused us to flash back to our Federal Courts class in law school, since it raised a host of procedural questions such as the effect of removal, whether certain defendants are "persons" under 42 U.S.C. § 1983, whether the federal court must have abstained from addressing the federal takings claim, whether there is a state damage remedy for deprivation of constitutional rights, and zoning estoppel under Hawaii law, among others.

Many of these issues were brought about as a result of Hawaii's unusual state-based zoning scheme, whereby all land in the four of Hawaii's five counties that exercise home rule was initially "classified" by the State into one of four classifications (urban, agricultural, rural, conservation). The four counties are allowed to zone the land within the "urban" and "agricultural" districts into the more familiar Euclidean zones that we're familiar with. What most folks would call a "rezoning" is called a "boundary amendment" or "reclassification" when dealing with the State land use designations, and the Land Use Commission is the agency that takes action, not the counties.

The cases themselves came about as a result of a reclassification of land from urban to agricultural, and, in the words of the latest federal court federal court order issued last year, "Plaintiff Bridge Aina Lea, LLC ('Bridge'), the owner of the parcel, claims that, in reclassifying the land, the Commission and certain commissioners violated Bridge's rights under the United States Constitution, the Hawaii Constitution, and various Hawaii laws." Order at 1-2. For more background on the federal action, see this post, "Guest Post: Federal Courts Flashback - Takings And Vested Rights Challenge To Land Use Commission."

Initially, the District Court stayed the federal action to allow the administrative appeal to get resolved in state court. Eventually, the Hawaii Supreme Court held the Commission was wrong when it reclassified the land to agricultural, but only because it did not comply with the requirements of state law (the Commission did not make specific findings of fact as required by statute and did not resolve the order to show cause within one calendar year), but rejected the owner's state and federal constitutional claims. The federal case, which by then was in the Ninth Circuit -- which held off its decision pending the ruling by the Hawaii Supreme Court -- was sent back to the District Court.

Last we checked in late in 2015, the U.S. District Court, in this order, had gotten rid of most of the federal case. It's a long decision (65 pages), but is full of the issues we are familiar with:

The Hawaii Supreme Court's decision in Bridge's favor rendered its federal court request for an injunction preventing the reclassification moot.

An injunction is not an available remedy for a taking -- only just compensation. That's a due process claim.

Preclusion principles bar Bridge's due process and equal protection claims. "Those issues, contained in Counts I and III, were decided by the Hawaii Supreme Court in the state administrative appeal." Order at 34-35.

Hawaii law does not allow for money damages as a remedy for equitable estoppel, only equitable (injunctive) relief. And the court already held that injunctive relief is moot (see above).

And immunity. Lots of immunity. See Order at 45-60.

You can't sue officials in their individual capacities for a taking. Order at 60-63.

After that, the only pieces left of the federal case are the takings claim seeking just compensation against the Commission and certain commissioners in their official capacities, as well as the vested rights claim for damages against the same parties.

In December, the State filed a Motion for Summary Judgment to get rid of these claims, arguing: (1) the affordable housing condition is not an "exaction" subject to Nollan/Dolan scrutiny (see, e.g., the San Josecase, in which a cert petition is now pending in the U.S. Supreme Court); (2) the plaintiffs missed the statute of limitations, and had two years from the date on which the condition was imposed to challenge it; (3) the only remedy for a state law vested rights claim is invalidating the government act and not damages; and (4) the State did not prevent the plaintiff from building, it was the lack of an EIS that prevented it (kind of a proximate or superseding cause argument). The property owner, of course, has its own view of the situation, and had responses to these arguments.

This morning, the District Court held a hearing on the State's motion for summary judgment, and we were fortunate enough to be able to pop in and observe. Deputy AG Bill Wynhoff ably argued for the State, while the property owners were represented by Bruce Voss. In our view, both advocates argued well -- zealously but also with great professionalism. (Ah, if only it could be so in all cases, no?).

The court did not issue a ruling, and took the motion under advisement/submission, stating that a ruling should be forthcoming by the end of the month. The arguments lasted for over an hour, and we won't go over all details, and will only hit some highlights:

There's more than one way to plead a takings claim, and it looks to us like the property owner did so, alleging a taking under a variety of theories.

Whether an unconstitutional conditions claim is really a takings claim, or is some kind of separate due process-ey claim, is still somewhat up in the air. Yes, the act complained of is the government making you made choices that you shouldn't be asked to make, but the definite flavor of every land-related unconstitutional conditions case is takings, takings, takings. See, e.g., Nollan, Dolan, Koontz. The Supreme Court's latest unconstitutional conditions case (Horne II) also has a takings flavor, even though it is not a case about land. But in our view, a property owner can plead and pursue both claims, separately.

Did the Hawaii Supreme Court reach out in its opinion and resolve the federal issues? According to the State, yes it did. The Supreme Court in a footnote upheld the affordable housing condition as "valid," and that means game over, and issue has been definitively litigated. We're not so sure. Seems like its dicta at best, and a case where the Hawaii Supreme Court was going out of its way to decide an issue that was not squarely before it, in order to cut off the plaintiff from pursuing it in federal court. We don't think the federal court owes the Hawaii Supreme Court any deference on this one, even if that court was acting "[i]n the interest of judicial economy" as it asserted when it reached out and decided the federal constitutional issues during the course of an administrative appeal. SeeDW Aina Lea Dev. LLC v. Land Use Comm'n, No. SCAP-13-00000091, slip op. at 70 (Haw. Nov. 24, 2014).

It's really kind of strange to see a takings case being litigated in federal court. Yes, the State removed the case from state court, as it had the power to do (even though the plaintiff could not have brought the claim originally in federal court under Williamson County). The court exhibited some understandable confusion about the nature and form of the claims which it is now considering: is this a § 1983 claim (remember, the 1983 claim has been dismissed)? Can a state be sued directly under the constitution? Is this a state law takings claim, or is this a federal Fifth Amendment claim?

Here's how we see it: the plaintiff's federal Fifth Amendment takings claims were not ripe, so it filed a state law takings claim in state court seeking just compensation. The State removing the case to federal court had two consequences: first, it dragged the state compensation claim into federal court, which then must apply state takings law to determine whether the property owner is owed just compensation under the Hawaii Constitution; second, the State waived any claim that the federal takings claim was not substantively ripe under Williamson County, even though the state has not yet denied compensation. Put another way, we think that by removing the case, the State conceded that compensation has not been provided and is not available via state procedures. Thus, both the federal and state takings claims are squarely presented, and neither requires a statute like § 1983, or its state law equivalent, to state a claim for relief, because both constitutional provisions are self-executing, and an owner may recover compensation even in the absence of enabling legislation.

If all of the above makes your eyes water, you are not alone, and if you'd rather just wait until the end of the month to read the District Court's opinion, we really wouldn't blame you.

Sidebar: we snapped the picture above -- a view of the entrance to the project site -- from the pull-out on Queen Kaahumanu Highway during our last visit to the area last month. The Google Earth view shows better the extent of the mauka development, and even some of the construction that has been undertaken.

February 3, 2016

We've posted a lot lately reporting on the 2016 ALI-CLE Eminent Domain and Land Valuation Litigation Conference, recently held in Austin. We have a couple of more posts for you before we turn to other things. Here is the first, a run-down of the blogs of faculty members, and others we were in the audience. If your blog is missing from this list, email me the link and I will update the post to include it.

February 1, 2016

Talk about timing: Dana Berliner, Andy Gowder, and I were talking about the Central Radio case during a session on free speech and other First Amendment issues at the recent ALI-CLE Eminent Domain Conference, when we learned that at the same time we were speaking about the case, the U.S. Court of Appeals for the Fourth Circuit was issuing its opinion on remand from the Supreme Court.

Bottom line: Norfolk, Virginia's sign ordinance is an unconstitutional restriction on free speech. See slip op. at 1 ("Applying the principles of content neutrality articulated in Reed, we hold that the sign ordinance challenged in the plaintiffs’ complaint is a content-based regulation that does not survive strict scrutiny. Accordingly, we reverse the district court’s judgment with respect to the plaintiffs’ First Amendment challenge and remand that claim to the district court to award nominal damages to the plaintiffs and for consideration of other appropriate relief.").

There's a lot of good language in Central Radio Co., Inc. v. City of Norfolk, No. 13-1996 (Jan. 29, 2016), and we won't go over the opinion in detail, as you really should pick it up and read the whole thing. But we will say this:

This result cannot be a big surprise, after the Court's GVR in light of the Reed case. Provided the Fourth Circuit got the Supreme Court's hint -- which it apparently did -- you kind of knew where this was likely to end up.

Claims of "content neutrality" only go so far. Municipal lawyers, take heed: content neutrality isn't a way to allow your clients to discriminate against messages they don't like, and after Reed, the courts are going to take a harder look at such claims to see if they really are what they say they are.

As we asked at the conference: are there any reasons why courts can look behind the curtain when it comes to free speech and religious freedoms (Church of the Lukumi Babalu Aye, anyone?), but not at claims of public use or purpose in eminent domain? We don't think so, and maybe this case is a small step in the right direction on that front.

In the coming days and weeks, we'll be posting more details about the conference. Our co-planning chairs Joe Waldo, Jack Sperber, and Andrew Brigham have assembled a great agenda, taught by the usual stellar faculty. If eminent domain, appraisal, or land use is your thing, you really should attend.

September 3, 2015

Here's the latest in a case that we've been following, which was in both state and federal court, Bridge Aina Lea v. Land Use Comm'n.

The litigation is a series of two lawsuits that originated in state court in the Third Circuit (Big Island), one an original jurisdiction civil rights lawsuit, the other an administrative appeal (that's a writ of administrative mandate for you Californians). The State removed the civil rights lawsuit to U.S. District Court in Honolulu and promptly moved to dismiss, and this portion of the case nearly caused us to flash back to our Federal Courts class in law school, since it raised a host of procedural questions such as the effect of removal, whether certain defendants are "persons" under 42 U.S.C. § 1983, whether the federal court must abstain from addressing the federal takings claim, whether there is a state damage remedy for deprivation of constitutional rights, and zoning estoppel under Hawaii law, among others.

Many of these issues were brought about as a result of Hawaii's unusual state-based zoning scheme, whereby all land in the four of Hawaii's five counties that exercise home rule was initially "classified" by the State into one of four classifications (urban, agricultural, rural, conservation). The four counties are allowed to zone the land within the "urban" and "agricultural" districts into the more familiar Euclidean zones that we're familiar with. What most folks would call a "rezoning" is called a "boundary amendment" or "reclassification" when dealing with the State land use designations, and the Land Use Commission is the agency that takes action, not the counties.

The cases arose out of a reclassification of land from urban to agricultural, and, in the words of the latest federal court federal court order, "Plaintiff Bridge Aina Lea, LLC ('Bridge'), the owner of the parcel, claims that, in reclassifying the land, the Commission and certain commissioners violated Bridge's rights under the United States Constitution, the Hawaii Constitution, and various Hawaii laws." Order at 1-2. For more background on the federal action, see this post, "Guest Post: Federal Courts Flashback - Takings And Vested Rights Challenge To Land Use Commission."

Initially, the District Court stayed the federal action to allow the administrative appeal to get resolved in state court. Eventually, the Hawaii Supreme Court held the Commission was wrong when it reclassified the land to agricultural, but only because it did not comply with the requirements of state law (the Commission did not make specific findings of fact as required by statute and did not resolve the order to show cause within one calendar year), but rejected the owner's state and federal constitutional claims. The federal case, which by then was in the Ninth Circuit -- which held off its decision pending the ruling by the Hawaii Supreme Court -- was sent back to the District Court.

In this order issued last week, the U.S. District Court for the District of Hawaii got rid of most of the federal case. It's a long decision (65 pages), but is full of the issues we are familiar with:

The Hawaii Supreme Court's decision in Bridge's favor rendered its federal court request for an injunction preventing the reclassification moot.

An injunction is not an available remedy for a taking -- only just compensation. That's a due process claim.

Preclusion principles bar Bridge's due process and equal protection claims. "Those issues, contained in Counts I and III, were decided by the Hawaii Supreme Court in the state administrative appeal." Order at 34-35.

Hawaii law does not allow for money damages as a remedy for equitable estoppel, only equitable (injunctive) relief. And the court already held that injunctive relief is moot (see above).

And immunity. Lots of immunity. See Order at 45-60.

You can't sue officials in their individual capacities for a taking. Order at 60-63.

So here's what's left in the federal case: the takings claim seeking just compensation against the Commission and certain commissioners in their official capacities, as well as the vested rights claim for damages against the same parties.

The portion of the District Court's order that stands out the most to us is its analysis of issue and claim preclusion. [Sidebar: some of us raised on "collateral estoppel" and "res judicata" still can't get used to the more precise -- but less law-ish -- "preclusion" labels.] Recall that Bridge split its claim between two state court lawsuits, an "appeal" from the Commission to circuit court under the Administrative Procedures Act (again, a Writ of Administrative Mandamus to you Californians), and a separate original jurisdiction action which asserted its constitutional and common law claims. Which it was entitled to do. Indeed, which it was required to do, based on Williamson County, at least for its takings claims. Based on federal question jurisdiction, the Commission removed the latter complaint to federal court. Again, fine with us.

But although the Hawaii Supreme Court was just supposed to be dealing with the state law administrative law issues, the court reached out and "[i]n the interest of judicial economy" decided the federal constitutional issues. Thus, when the federal court was eventually presented with the federal questions, it said too bad, so sad, you already had your shot, even though the Hawaii Supreme Court really wasn't acting on a record developed in the course of an original jurisdiction lawsuit, it was only on an administrative record. An argument raised, ironically, by the Commission:

As a preliminary matter, the LUC argues that the circuit court erred in ruling on DW’s and Bridge’s due process and equal protection arguments because the LUC had no opportunity to present evidence and did not have the benefit of a trial by jury. The LUC argues that it was “inappropriate” for the circuit court to rule on these constitutional claims under such ;circumstances, and that in doing so, the court “deprived the LUC and Commissioners of any process whatsoever.”

So once again, a property owner's federal constitutional claims -- raised in a federal forum -- get decided by a state court. We suppose that this may be a no harm, no foul situation since Bridge did originally raise its federal constitutional claims in state court, and it was the Commission which removed the case to federal court. So Bridge couldn't squawk too loudly about having those claims decided by the Hawaii Supreme Court and being deprived of a federal forum. They got what they asked for, after all. But perhaps the only reason Bridge filed its federal claims in state court was because Williamson County required it to. This the headspinning stuff that we get under that case's state procedures requirement.

The only question we had is whether this would be a fair result if Bridge could have filed its original jurisdiction action in federal court. It just doesn't seem so.

August 31, 2015

You remember that case about property on the rural north shore of Oahu, in which the City and County of Honolulu is condemning a vacant parcel in order to build a new fire station. The City hasn't moved on building the station and hasn't included money in the budget to do so. There's even some question about whether this is a good place for a fire station.

All this caused the property owner to erect several protest signs on the parcel, one of which is depicted above. An additional brouhaha arose when the City removed and stored the signs, which caused the owner to sue the City in federal court, alleging among other things, due process and First and Fourth Amendment violations, and violations of the City's "stored property" ordinance.

We reported on proceedings in the first case, where the court denied the City's motion for summary judgment. The City argued the writ of immediate possession which it obtained in the state court condemnation proceedings effectively transformed the parcel into City property, and gave the City exclusive possession of the land. Since the City possessed the property, it argued, it was not in the wrong when it removed the protest signs from its own land.

The federal court rejected the argument in part, holding that the Hawaii eminent domain statute which allows governmental condemnors to obtain immediate possession of property, Haw. Rev. Stat. § 101-29, does not mean that the property subject to condemnation is publicly-owned once a writ is issued. Nor does it give the condemnor exclusive possession as a matter of law, merely the ability "to do such work thereon as may be required for the purpose for which the taking of the property is sought."

And because there were questions of whether the City had acted like it was in exclusive possession (the City continued sent the owner property tax bills, and cited her for failing to keep the property free of weeds -- talk about municipal chutzpah), the court concluded there were issues of fact still unresolved about whether the City had taken full advantage of what the statute allows, and actually exercised exclusive possession. And that meant no summary judgment.

That case eventually settled for $21.

As we noted, the court's rationale appeared to us to be the right call in this situation. Yes, the statute could give a condemnor exclusive possession, provided that it is required for the purpose for which "the taking of the property is sought." But here, the City blew hot and cold and did not act like it had exclusive possession: it dinged the owner for letting the parcel get overgrown; it collected property taxes.

The court's ruling was a good reminder to Hawaii condemning agencies that they need to adhere to the limitations in the eminent domain statutes, and cannot act outside the strict confines of what the law allows. Even though Hawaii's statute allowing immediate possession is commonly referred to as a "quick-take" rule, in actuality it is not a true quick-take statute because it does not transfer title immediately, merely the right of possession as noted in the language quoted above. True quick-take statutes immediately transfer ownership and title to the condemnor. By contrast, Hawaii law holds off on title and ownership transfer until there's been a judgment of condemnation.

At the very least, the ruling is a reminder that agencies can't take inconsistent and contradictory positions, arguing on one hand that the statute granted exclusive possession, yet on the other doing things inconsistent with that posture. But because eminent domain is such a potent power, condemning agencies often behave as if they have carte blanche and can take what they want, the rights of the property owners be darned. And because they are going to win in the end and get the property, owners have no business insisting that their rights be respected. But the requirements of the statutes are not mere details that do not need to be scrupulously followed.

But now here's chapter 2 of the saga. After the owned filed the first federal lawsuit, the City sent a notice that it was exercising exclusive possession, issued tax reimbursement checks, and informed Reynolds (a recyling business that had been on the land) that it could not operate there. Pretty much everything it failed to do the first time.

The property owner put up several more signs, which the City, after notice, removed. The City rented the abutting property, which it owns, to Reynolds. The property owner brought another suit in federal court, which "largely recycles her Complaint from the First Action, but also includes additional allegations regarding an October 18, 2013 seizure of signs and the City's alleged interference with [her] contract with Reynolds Recycling Inc. ("Reynolds"), who was leasing the subject property from [her]."

In this order issued earlier this week, the court granted the City summary judgment on all federal claims. The difference between now and before is that the City effectively rectified its ambiguous behavior and started consistently acting like the exclusive possessor of the land:

Specifically, after the May 2013 seizure of James’ signs and the filing of the First Action, the City made well known to James that, despite its earlier mixed messages regarding James’ possession, the City was now taking exclusion possession of the subject property. In particular, the City established unequivocally that it was taking possession of the subject property by: (1) filing in the State Action an August 15, 2013 Certification stating that the City took possession of the subject property on June 4, 2010, Doc. No. 14-17, City Ex. M; (2) notifying James’ then-attorneys that James does not have a legal right of possession to the subject property, that neither James nor any other person is authorized to enter the subject property, and that any personal property found on the subject property will be removed without notice, Doc. No. 29-6, James Opp’n Ex. F; Doc. No. 14-21, City Ex. Q; and (3) issuing tax reimbursement checks on the subject property to James.

Slip op. at 19-20.

Thus, the court concluded, "[t]hese actions left no question that the City was exercising its right of possession of the subject property to the exclusion of James, and the City took no contradictory actions suggesting to James that she still had possession of the subject property (such as by taxing James and/or requiring her to maintain the property as it previously did)." Slip op. at 20.

Once the court determined the City now has exclusive possession of the land, it had little problem disposing of the property owner's federal claims. Her Fourth Amendment rights were not violated, because the City has a clear possessory interest in the land, and its seizure of the signs was reasonable. The City provided her all the process that was required under the circumstances because it gave pre-deprivation notice and "announced its intentions" to the owner which allowed her the chance to remove or retrieve them. It was not a free speech problem because it is not a public forum for speech, it is "a vacant lot on which a fire station is to be built, and the City never opened it to the public." Slip op. at 29.

The court refused to exercise supplemental jurisdiction over the owner's state law claims.

What's left is the City's ongoing eminent domain case in state court, in which it estimates the compensation for the land taken is $521,000.

The case did not present takings, land use, or eminent domain issues, but we've been following along with interest nonetheless, because at stake was the right of a Los Angeles hotel owner to require the police to obtain a warrant before he allowed inspection of the hotel's guest register. The Court's majority said yes, hotel owners really do need the opportunity to make the police get a warrant before the police can force the hotel to open up its records.

The opinion by Justice Sotomayor and joined by Justices Kennedy, Ginsburg, Breyer, and Kagan, didn't talk about property rights and the like, only about "privacy" and the usual search-and-seizure stuff. But as we've discussed before, they're all related (the Fourth Amendment recognizes our security in our "persons, houses, papers, and effects" -- you know, our property), and as this decision from the Eleventh Circuit reminded, the Fifth Amendment isn't the only arrow in your quiver when you are defending someone's property rights. See this case, from a New York state court for a similar vibe.

The Patel majority rejected the notion that the mere fact the hotel industry is "pervasively regulated" means that the business owners give up all their rights (are you listening, rent control and affordable housing?). Kinda like the raisin market, perhaps?

January 27, 2015

Sorrentino v. Godinez, No. 13-3421 (Jan. 23, 2015) was a lawsuit by prisoners complaining that several items which they purchased from the prison commisary -- a fan and a typewriter -- were later declared by the warden to be prohibited contraband.

Under the new rules, their property was "removed," and the prisoners given options for what they wanted done with the items: destroy them, store them, or send them to someone on the outside at the prison's expense. They didn't like these options and instead sued, claiming a taking, among other things. The District Court dismissed with prejudice.

The Seventh Circuit affirmed the result, concluding that the plaintiffs' failure to avail themselves of the available remedy under Illinois law for obtaining compensation in the Illinois Court of Claims for a physical taking was fatal: "[t]he latter rule is what dooms Sorrentino's claims. Illinois provides such a procedure, but he has not tried to use it." Slip op. at 5. The court concluded that it would not be futile for Sorrentino to give this a try:

Even if he is correct that the Court of Claims is the proper court and that it cannot grant equitable relief, see Garimella v. Bd. of Trustees of Univ. of Ill., 50 Ill. Ct. Cl. 350, 353 (1996) (concluding that the Court of Claims cannot grant equitable relief but citing Illinois cases that imply the opposite), that limitation does not automatically mean that he may seek an injunction in a different court. He and Neal complain of a taking, and the normal remedy for a taking is monetary relief, which the Illinois Court of Claims can provide.

Slip op. at 6.

The only problem the Seventh Circuit had with the District Court's judgment was that the dismissal was with prejudice. The dismissal should have been without prejudice, "so that [the plaintiffs] may avail themselves of whatever procedures may still be available under Illinois law." Slip op. at 7.

This is the federal court side of a case in which a developer is suing the State Land Use Commission (and certain Commissioners in their individual capacities) after the LUC reclassified its land on the Big Island from urban to agricultural use. Aina Lea filed two actions in state court: an administrative appeal under the administrative procedures act, and an original jurisdiction civil rights complaint. The defendants removed the latter action to federal court. The District Court, however, abstained. After oral arguments in the Ninth Circuit, the panel withdrew the case from submission to allow the Hawaii Supreme Court to make its ruling. Meanwhile, the state case chugged forward, and late last year, the Hawaii Supreme Court issued its opinion. After that, we've been waiting for the other shoe to drop, and today it did.

In this short memorandum opinion, the Ninth Circuit panel sort of affirmed ("While this case originally met Pullman’s requirements . . ."), but concluded that the issue was pretty much mooted by the Hawaii Supreme Court's ruling:

After the district court’s decision, and after oral argument to this court, the Supreme Court of Hawai‘i held that the LUC erred when it reclassified the parcel as agricultural without following the state’s procedural requirements under Section 205-4 of the Hawai‘i Revised Statutes.

Slip op. at 3. The court remanded the case back to the District Court for "appropriate action" and a decision "in the first instance whether the LUC commissioners sued in their individual capacites are entitled to some form of judicial immunity." Slip op. at 4.

January 21, 2015

Here's the latest in a case we've been following, the property owner's cert petition, filed last week, in which a U.S. District Court invalidated a Florida county's "Right of Way Preservation Ordinance" which allows it to land bank for a future road corridors by means of an exaction. The court concluded the ordinance is "both coercive and confiscatory in nature and constitutionally offensive in both content and operation," and struck it down under Nollan/Dolan.

The transportation corridor protrudes into Hillcrest's undeveloped commercially-zoned property. Hillcrest wanted to build a shopping center and it submitted a plan to the Review Committee, which rejected the application because it did not account for the corridor. Hillcrest submitted a second plan which was rejected, and a third plan which was eventually approved, which required Hillcrest to dedicate the right of way to the county. Hillcrest reserved its right to object to the dedication. and filed a federal action seeking to invalidate the ordinance, asserting several claims including facial and as-applied invalidity under federal due process, and a takings claim under Florida law. Hillcrest had not applied for a waiver or a variance.

Although the District Court invalidated the ordinance, on an interlocutory appeal of the facial challenge, the Eleventh Circuit disagreed, applying Florida's personal injury statute of limitations to conclude that Hillcrest's facial due process claim had not been raised within four years of the time Hillcrest had been injured. The court concluded that the date of injury was the date of enactment of the ordinance, and not the date on which the ordinance governed Hillcrest's project.

1. Whether a state statute of limitations should apply to a claim brought pursuant to 42 U.S.C. § 1983 seeking to enjoin enforcement of a county ordinance that, on its face, and in violation of the Fifth Amendment’s Due Process Clause, extortionately leverages the police power every time it is applied to coerce landowners into dedicating road right-of-way the county would otherwise have to pay for.

2. If there is a statute of limitations, whether the federal Continuing Violation Doctrine applies, such that a landowner whose property is subject to the ordinance may elect to bring a facial Due Process claim either upon enactment of the ordinance or later, within the limitations period following application of the ordinance to that landowner.

January 15, 2015

Professor Richard Epstein began the Hawaii Land Use Law Conference with the keynote presentation on "Stealth Takings: Exactions, Impact Fees, and More," which was his usual comprehensive and non-stop takedown of takings law.

Our panel on Impact Fees and Exactions After Koontz followed, and here are the promised links and other materials which I mentioned:

Later today, I will also post up a recording of my short backgrounder on the exaction issue, to give you a flavor of the panel discussion (the Hawaii State Bar Assocation recorded the sessions, and will release them later).

Our thanks to all who are attending -- this is the largest group of attendees I've seen in a while, and it's encouraging as faculty to see an engaged audience. The conference continues tomorrow.

January 14, 2015

In a 2-1 decision, the U.S. Court of Appeals for the Fourth Circuit concluded that Norfolk, Virginia's sign ordinance did not violate the First Amendment, when it was applied to bar the anti-eminent domain banner shown above.

Central Radio Co. Inc. v. City of Norfolk, No. 13-1996 (4th Cir. Jan. 13, 2015), arose from a situation that also resulted in a property-owner favorable ruling from the Virginia Supreme Court in 2013. SeePKO Ventures, LLC v. Norfolk Redevelopment and Housing Authority, 747 S.E.2d 826 (Va. Sep. 12, 2013) (a case won by our Owners' Counsel colleagues at Waldo & Lyle). The city's redevelopment authority planned on taking property to transfer it to Old Dominion University, but the Supreme Court shut it down, holding that the agency did not have the authority to take non-blighted property. See our write up of that decision here.

While it was pending, however, the case generated much public controversy, and a local business put up a banner on its building voicing its feelings about the situation. As the Fourth Circuit's majority opinon noted, "[t]he plaintiffs intended that the banner 'be visible for several blocks along Hampton Boulevard' and 'make a statement about Central Radio’s fight with the NRHA,' which would constitute 'a shout' rather than 'a whisper.'" Slip op. at 6.

An Old Dominion employee saw the shouting, complained, and city zoning enforcement staff was soon on the case. Get into compliance with the sign code -- which regulates the size, placement, construction, and method of illumination of signs -- or be fined, they said. As you might expect, the signers didn't, and they were cited. Next stop, federal court:

The plaintiffs alleged that the sign code was unconstitutional because it subjected their display to size and location restrictions, but exempted certain “flag[s] or emblem[s]” and “works of art” from any similar limitations. The plaintiffs also alleged that the sign code’s provision requiring them to obtain a sign certificate before erecting a display effectuated an impermissible prior restraint on speech, and that the City selectively applied the sign code to the plaintiffs’ display in a discriminatory manner. In addition to requesting declaratory relief and nominal damages, the plaintiffs moved for a temporary restraining order and a preliminary injunction.

Slip op. at 8.

The district court rejected their arguments, and the Fourth Circuit affirmed, concluding that the sign ordinance was content-neutral, even though it exempted national and religious "flags" and "emblems," and "works of art" that do not relate to a product or service. The city lacked "censorial intent to value some forms of speech over others to distort public debate, to restrict expression because of its message, its ideas, its subject matter, or to prohibit the express of an idea simply because society finds the idea itself offensive or disagreeable." Slip op. at 11. Bottom line: the plaintiffs weren't singled out, and the city regulates most every sign:

The City generally allows signs regardless of the message displayed, and simply restricts the time, place, or manner of their location. Exemptions to those restrictions may have an “incidental effect on some speakers or messages,” but such exemptions do not convert the sign code into a content-based restriction on speech when the exemptions bear a “reasonable relationship” to the City’s asserted interests.

Content neutrality results in "intermediate scrutiny," and the court concluded the ordinance furthered the city's interest in physical appearance, and reducing distractions, was narrowly tailored, and left open alternative channels of communication. The plaintiffs could have reduced the size of their 375 square-foot banner to 60 square feet, and they'd be okay.

The latest case seems to create a circuit split. The Eighth Circuit, in the opinion linked above apprears to have reached the opposite conclusion on a very similar ordinance, concluding that St. Louis' sign ordinance was not content neutral.

In 1966, the owners purchased 1400 acres for residential development. In 1969, the owners recorded a subdivision plat, to make both residential and commerical uses. The county had no zoning ordinance in place at that time. The owners spent $425,000 on preliminary work and infrastructure, such as surveying, engineering and grading. Big bucks in 1960's dollars.

The county adopted a zoning ordinance in 1971, zoning the property for "RO2," which prohibits most businesses, including those contemplated by the owners. "Nevertheless, plaintiffs continued to believe that they would be allowed to commerically develop their property." Slip op. at 4.

They were wrong. Flash forward to 2004. The owners sought to develop the commerical portions of the land, to build a convenience store, offices, a post office, and a restaurant. The county said no. Three years of trying to convince the county otherwise was to no avail. The owners filed suit. The trial court dismissed for failure to state a claim, apparently accepting the county's argument the owners had not exhausted administrative remedies, the defendants had immunity, and the statute of limitations had expired. You know the drill.

The court of appeals reversed the dismissal in part, holding that the owners exhausted their administrative remedies, and "sufficiently pled" their vested rights claims. There was no need to avail themselves of more administrative procedures, "because the Currituck County Board of Adjustment would not be authorized to hear plaintffs' common law vested rights claim." Slip op. at 10. The role of the agency is only to interpret and apply the zoning ordinance and whether to grant a variance. These type of boards do not have jurisdiction to adjudicate constitutional claims. Seems about right to us.

As to vested rights, the owners alleged:

their property was not zoned at the time they made their expenditures to prepare the business lots. They have alleged that this use was lawful at the time the expenditures were made and that the expenditures were made in good faith reliance on that fact. They have alleged that they expended over $400,000 on the development. They allege that they are prejudiced by the zoning ordinance because their intended commercial use would not be permitted under the ordinance.

Slip op. at 17-18. That was enough, because under North Carolina decisional law, a vested rights claim is based on substantial expenditures made in reliance on a lack of zoning.

The court also concluded that the defendants were not immune from the federal constitutional claims (section 1983, equal protection, due process).

The court upheld the dismissal of the owners' claim that the county had to allow business development of the property because for years it had taxed the property as business property.

December 5, 2014

On one hand, the U.S. Court of Appeals' opinion in Hutto v. South Carolina Retirement System, No. 13-1523 (Dec. 5, 2014) is old hat: the court concluded that a plaintiff alleging a federal takings claim could not bring that claim in federal court. But this case is different because it -- unlike those where Williamson County ripeness is invoked to (in theory) merely delay federal court jurisdiction -- resulted in a permanent bar.

The difference here is that the plaintiffs were suing the state retirement system and state officers in the their official capacities, claiming that a 2005 amendment to South Carolina's state employee retirement system which required those who retire and then return to work to make the same contributions to state-created pension plans as pre-retirement employees but without receiving further pension benefits, was a taking. They filed their complaint in federal court, and the defendants raised the Eleventh Amendment as a defense. That bars federal courts from hearing lawsuits against a state unless the state has consented.

The court first concluded that a lawsuit against the South Carolina retirement system was, in effect, a lawsuit against South Carolina:

At bottom, we conclude that the relevant indicators strongly indicate that the Retirement System and the Trust are arms of the State of South Carolina and are therefore protected under the Eleventh Amendment. This conclusion is consistent with the holdings of the overwhelming number of federal courts that have held that similar retirement systems in other States are arms of the State.

Slip op. at 25. The court also reached the same conclusion about the state officials, and also concluded that the Ex parte Young prospective injunctive relief exception to 11th Amendment immunity did not apply, because the officials did not have statutory authority to enforce the 2005 act. See slip op. at 28.

With those preliminaries out of the way, the court concluded that the Takings Clause is not an exception to 11th Amendment immunity, and that the plaintiffs could have brought their takings claims in a South Carolina court:

Because the plaintiffs can have their takings claims heard in South Carolina state courts, the Eleventh Amendment does not render the Takings Clause an empty promise. But in concluding that the Fifth Amendment Takings Clause does not, in this case, trump the Eleventh Amendment, we do not decide the question whether a State can close its doors to a takings claim or the question whether the Eleventh Amendment would ban a takings claim in federal court if the State courts were to refuse to hear such a claim.

Slip op. at 34.

As for any circuit split, the court noted "that every other court of appeals to have decided the question has held that the Takings Clause does not override the Eleventh Amendment. Id. at 36.

The litigation is a series of two lawsuits that originated in state court in the Third Circuit (Big Island), one an original jurisdiction civil rights lawsuit, the other an administrative appeal, the latter being the case in which the Supreme Court just ruled.

The essence of the plaintiff's allegations is that the State Land Use Commission wrongfully amended the land use boundaries from "urban" back to to "agriculture." Many years earlier, the LUC had amended the boundary to urban on the condition that the owner provide a certain number of affordable units by 2006. In 2008, the developer had not fully done so and the LUC ordered it to show cause why the land classification should not revert to agricultural. The developer asserted it was well underway, even if it had not satisfied the conditions entirely.

In the administrative appeal, the state court smacked the LUC pretty hard, and issued issued an order vacating the LUC's reclassification. The court concluded the LUC exceeded its statutory authority, and violated the developers' due process, fifth amendment, and equal protection rights. That's the ruling now on appeal in the Hawaii Supreme Court. More background on the case here. The State removed the civil rights lawsuit to U.S. District Court in Honolulu and promptly moved to dismiss. The District Court agreed, and after the case was argued in the Ninth Circuit, that court held off on a ruling, pending the outcome of the Hawaii Supreme Court case.

Well, the Supreme Court has now ruled. We haven't had a chance to digest all 78 pages of the unanimous opinion (we'll do so in a later post), but here's the summary, straight from the opinion itself:

This appeal turns on whether the Land Use Commission (the LUC) properly reverted land to its former land use classification pursuant to Hawaii Revised Statutes § 205-4(g) (2001 & Supp. 2007). We hold that the LUC erred in reverting the land without complying with the requirements of HRS § 205-4 because the land owners had substantially commenced use of the land in accordance with the representations they had made to the Commission.

. . .

We hold that the LUC erred in reverting the property without complying with the requirements of HRS § 205-4 that are generally applicable when land use boundaries are changed. See infra at 64-65. Once the LUC issues an OSC, the procedures it must follow before reverting land depend upon whether the petitioner has substantially commenced use of the land. Once use of the land has substantially commenced, the LUC is bound by the requirements of HRS § 205-4. Here, by the time the LUC reverted the property to the agricultural land use district, Bridge and DW had substantially commenced use of the land in accordance with their representations. Specifically, they had constructed sixteen townhouses on the property, commenced construction of numerous other townhouses, and graded the site for additional townhouses and roads. At that point, more than $20 million had been spent on the project. Although Bridge and DW had substantially commenced use of the land, the LUC failed to comply with the requirements of HRS § 205-4. The circuit court therefore correctly concluded that the LUC erred in reverting the property.

. . .

The circuit court also erred in concluding that Bridge’s and DW’s procedural and substantive due process rights and equal protection rights were violated. With respect to procedural due process, both Bridge and DW had notice of the OSC and that the LUC might revert the property. They also each had a meaningful opportunity to be heard on the proposed reversion. With regard to substantive due process, the LUC’s reversion was not “clearly arbitrary and unreasonable,” given the project’s long history, the various representations made to the LUC, and the petitioners’ failure to meet deadlines. With respect to Bridge’s and DW’s equal protection arguments, the record does not establish that the LUC’s imposition of a condition and subsequent reversion of the property constituted a violation of the petitioners’ equal protection rights.

Slip op. at 1, 4-6. So, a win for the developer on the reclassification, but not on its consitutional claims.

November 13, 2014

Today, on behalf of the National Federation of Independent Business Small Business Legal Center, we filed this amicus brief in Kurtz v. Verizon New York, Inc., No. 14-439 (cert. petition filed Oct. 14, 2014). The cert petition, filed on Kurtz's behalf by the Institute for Justice, is posted here.

That's the case in which the Second Circuit threw out a complaint on Williamson County ripeness grounds. Odd thing was that the court held that a procedural due process claim was not ripe under Williamson County's exhaustion of state remedies prong. But wait, you say, Williamson County is based on a takings-specific rationale: a federal takings claim is not ripe for federal court review until just compensation has been denied by the state (inclulding a state court). That's what our brief says, too:

For nearly 30 years, Williamson County’s state remedies requirement has required federal courts to wash their hands of their most sacred obligation: to serve as the forum for protecting federal constitutional rights. This Court cast the state remedies requirement as a necessary step in ripening a regulatory takings claim for eventual federal court review. But in practice, the state remedies requirement has become an insurmountable procedural hurdle for property owners asserting their federal constitutional rights, and is a categorical bar to federal review even where, as in this case, a property owner may assert more than just a takings claim. Not surprisingly, Williamson County has been subject to criticism from the academy, the practicing bar, and members of this Court.

This brief makes two points. First, NFIB Legal Center argues that there is no basis to extend Williamson County’s state remedies requirement to non-takings claims simply because those claims may share the same underlying facts with a takings claim. As this Court has held, takings and due process are distinct theories, with distinct remedies. The Second Circuit, however, abandoned that distinction. In doing so, it rewrote the plaintiffs’ complaint and effectively eliminated their due process claims, requiring the plaintiffs to seek just compensation in state court. A procedural due process claim should not be subjected to a requirement to pursue “just compensation” in state courts, because in Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 540-45 (2005), this Court made clear that due process and takings are different.

Second, this brief summarizes the tortured history of Williamson County, briefly reciting how the case has created inconsistent and irreconcilable decisions regarding claim preclusion, issue preclusion, and removal, the net result of which is that a property owner has almost no chance of having a federal court resolve her federal constitutional claim. NFIB Legal Center explicitly calls for this Court to overrule the Williamson County state remedies requirement.

Br. at 2-3. The brief also points out that to apply the Williamson County ripeness rule to a due process claim, the Second Circuit had to effectively rewrite the plaintiffs' complaint:

Complaints about so-called “judicial activism” usually object to courts “legislating from the bench” by reading words into statutes that aren’t there, and the like. See, e.g., Keenan D. Kmiec, The Origin and Current Meanings of “Judicial Activism”, 92 Calif. L. Rev. 1441, 1471 (2004) (quoting Florida v. Wells, 495 U.S. 1, 13 (1990) (Stevens, J., dissenting) (“But to reach out so blatantly and unnecessarily to make new law in a case of this kind is unabashed judicial activism.”)). But perhaps the most pernicious—and ultimately more troubling—form of judicial activism is on full display in the Second Circuit’s opinion here, because in order to reach its conclusion that Kurtz’s procedural due process claims were subject to Williamson County’s requirements, the court first had to rewrite the plaintiffs’ complaint.

Br. at 5.

Special kudos to Emily Adams, a Utah appellate practitioner, who did the lion's share of the brief, and our Damon Key colleague Chris Leong, who also pitched in.

There are other amicus briefs being filed, and we'll post those as they come in. In the meantime, stay tuned, or follow along on the Supreme Court's docket here.

September 19, 2014

In Young v. Larimer County Sheriff's Office, No. 13CA1338 (Sep. 11, 2014), the sheriff raided Mr. Young's (medical) marijuana grow and seized as evidence "forty-two mariijuana plants by cutting them off just above the roots."

Now, we don't know much of anything about the botany of the cannabis plant, medical or otherwise. And the court might not have any specialized knowledge either. But it doesn't take Cheech and Chong to know that "[t]his action killed the plants." Slip op. at 2. Bummer, man.

The jury was more kind to Mr. Young than was the sheriff. It bought Young's claim that his weed was not evidence, but medicine under the Colorado medical marijuana statute. The "jury acquitted him of all charges based on the affirmative defense of medical use of marijuana by a person suffering from a debilitating medical condition." Id. As a consequence, the court ordered under Colorado law that all of the evidence which the sheriff seized was to be returned to Mr. Young, including the plants.

The beginning of the next sentence of the opinion tells you where this one was heading. "After the dead plants were returned ... "

Young brought an action for damages on the basis that the deputies killed the plants, which were now worthless. He asserted two claims. The first was under 42 U.S.C. § 1983 that the sheriff, acting under color of state law had impaired Young's federal rights. Among the rights which he claimed the sheriff violated? You guessed it, the right to just compensation for the taking of his property, his weed. We noted that in a somewhat similar situation a couple of years ago that "thank goodness they didn't raise a takings claim," but now the court was confronted with it. Second, that the seizure violated the Colorado Constitution's takings clause.

Both the trial court and the court of appeals agreed there was no section 1983 taking because Young's dope isn't property. Yes, it is recognized as property under Colorado law, but this is not a property interest that the feds need recognize, especially when marijuana is still illegal under federal law. Thus, no federal right was violated, thus no section 1983 claim. An easy case.

But, as we noted yesterday, federal law isn't the last word on takings when a property owner raises a claim under the state constitution, and the court needed more in-depth analysis in order to reach the same "no taking" result. The court first determined the taking wasn't a private taking, because it was the seizure of evidence for a criminal prosecution, and the court rejected Young's argument that the taking was "for public use." The focus of the analysis, however, was on the line of cases which hold that there is no taking because a seizure for evidentiary purposes is within the government's police powers and thus not a taking. See Amerisource Corp. v. United States, 525 F.3d 1149 (Fed. Cir. 2008). Young's acquittal didn't change the result, the court held, and it ruled no taking. An exercise of the police power cannot be a taking.

Does that rationale hold up? We have our doubts, although we must admit that it is somewhat appealing at least on the surface. While the result in this and similar cases seems vaguely correct, when we get into detail, we can't quite come up with a good reason why that is so. After all, when the government exercises its police powers in a way that results in a physical seizure of property that's not only a taking, it's a taking per se. Why that result should be different when the police power is employed to investigate alleged crime, we're not sure.

One of these days, the Supreme Court is going to get this issue and let us know.

September 17, 2014

He might be from Iowa, but that guy who plays him is from north of the border, so our kudos to a Canadian for the best dramatic rendition of our founding document.

And in that spirit, we explain the plural parenthetical in this post's title, which we picked up from a talk last evening by Hawaii Supreme Court Justice Simeon Acoba and U. Hawaii Law School Dean Avi Soifer at the Judiciary History Center, "Who Trumps Whom: Exploring Federalism in Hawaii." The talk focused on the ways that state constitutional protections can extend beyond what the U.S. Constitution requires (the "floor vs ceiling" theory), and Justice Acoba suggested that today really should be called "Constitutions Day" to celebrate both the U.S. and state constitutions.

This was a good reminder that the Fifth Amendment's Takings Clause is not a property owner's last line of defense, but only the first, and state takings provisions may -- and often do -- recognize greater rights, particularly for those of us whose state constitution contains an "or damaged" clause. For example, the Minnesota Supreme Court held not too long ago that a "substantial and measurable decline in market value" results in a right to compensation under the state constitution, even if it might not be a Fifth Amendment taking under Penn Central. The Sixth Circuit also noted that the Ohio Constitution "affords greater protection than the federal Takings Clause," and the lower court was wrong to assume that simply because the complained-of act did not violate the U.S. Constitution, that it also was ok under Ohio law.

August 27, 2014

Remember that case which we posted about earlier, in which the City and County of Honolulu condemned an undeveloped lot in rural Oahu for a fire station, but has been met with staunch resistance by the property owners? Not only did we post on the case, but it made national waves, also.

The City filed an eminent domain action in state court, and obtained a writ of immediate possession. After that, the City removed the eminent domain protest signs the owners had maintained on the property. The owners objected, filing a complaint in U.S. District Court alleging that the City went on the property and posted a "removal notice" under the City's newly-adopted "Bill 54," an ordinance allowing the City to seize property "stored" on public property provided it "tags" it 24 hours in advance, and that the removal was retaliation for the signs' content.

The complaint alleges that the day following the seizure, the City "pulled up the signs from the ground" and stored them. The owners maintain the property is not yet public property (under Hawaii law, title does not pass in eminent domain until the court enters a judgment), so the City had no right to remove and store their signs. The complaint's causes of action include violation of the Fourth Amendment search and seizure provisions, a violation of procedural due process, a First Amendment violation of her speech rights, and others including common law trespass, conversion, trespass to chattels, and replevin, and seeks damages under § 1983, declaratory judgments, and injunctive relief.

Each side moved for summary judgment, and the federal court last week issued this order denying both motions.

The City asserted that once it obtained the order of immediate possession from the state court, the property became public property, and the owners surrendered their rights to maintain the protest signs. The owners countered that the writ did not give the City ownership, and that the City did things after it obtained the order that were consistent with the owners still having rights, such as allowing the owners to maintain the property, issuing citations to the owners when they failed to do so ("When James failed to mow the lot frequently enough, James received a September 14, 2011 citation from the City for a 'Vacant Lot Overgrown.'"), and accepting property tax payments. The City also has not funded the fire station, and doesn't seem to be making any effort to actually build it.

Under Haw. Rev. Stat. § 101-29, state and county condemnors can get immediate ex parte possession by making a motion and paying an estimate of just compensation to the court. The court "shall" issue the order which gives the condemnor "possession of the real property sought to be condemned and permitting the State or county to do such work thereon as may be required for the purpose for which the taking of the property is sought." The court rejected the City's argument that this language meant that as a matter of law, it has all rights of a property owner. See Order at 11 ("In light of the Possession Order, the City argues that the City had possession of the subject property to the exclusion of James, meaning that James was trespassing on the subject property when she erected the signs and that the City had the absolute right to remove them."). The court recognized -- correctly, we think -- that the issue was whether the City's possession was exclusive under the statute and the order of possession. The court concluded the statute:

says nothing about the City obtaining exclusive possession of real property - rather, it merely states that upon the appropriate showing, the State court will issue an ex parte order putting the City "in possession of the real property sought to be condemned and permitting [the City] to do such work thereon as may be required for the purpose for which the taking of the property is sought." Just as with the Possession Order, this languages suggests that possession is not absolute -- § 101-29 does not grant the City free reign [sic] to do as it pleases with the property, and the City may only do such work as may be required for the purpose of the taking. And even the City recognizes that § 101-29 does not totally divest the landowner of all rights to the real property -- it does not operate to transfer title of the real property, which occurs at the end of a condemnation action.

Order at 13-14 (emphasis original). With the statute and the order of possession not giving the City rights to exclude the owners as a matter of law, the court turned to the facts and concluded that there was a dispute over exactly what actions the City took post-possession that were inconsistent with its claim that the owners had no rights. Order at 19-20 ("Despite this general purpose of quick-take statutes, the City ignores that its own actions are not consonant with its assertion that it took possession of the subject property at the time of the Possession Order. The City confuses what it could have done under the quick-take statute and what it actually did. As a result, the general purpose of the quick-take statute does not resolve this factual dispute.") (emphasis original). And you know what a factual dispute means: summary judgment denied, and you're going to trial.

The court also denied the property owners' motion for summary judgment on their procedural due process, trespass and conversion claims since there are factual disputes about whether the owners could have retrieved the signs from the City.

Finally, this little bit of municipal chutzpah: the City responded to the owners' argument that it did not exercise exclusive control over the property because it either allowed or required the owners to continue their responsibilities as property owners by paying property taxes, and by maintaining the property (and getting cited by the City when they didn't), by asserting that the owners had no obligation to do so, and should have either refused to respond, or sought reimbursement of the property tax payments and vacatur of the citations. The court rightly rejected that argument:

it appears that the City either ceded at least some of its possessory rights to James and/or required James to continue her responsibilities of ownership and maintenance of the subject property. Indeed, James did not take care of the subject property or pay taxes out of largess but because she was prompted by the City, who now asserts she had no obligation to do so. That James could seek reimbursement of the taxes and/or vacatur of the citations does not change the facts -- the City itself directed her to exercise indica of ownership over the subject property.

We hold that, like the Takings Clause of the United States Constitution, article I, section 21 of the Tennessee Constitution encompasses regulatory takings and that the Property Owners’ complaint is sufficient to allege a state constitutional regulatory taking claim, for which they may seek compensation under Tennessee’s inverse condemnation statute, Tennessee Code Annotated section 29-16-123.

Slip op. at 12.

That's all well and good, and we applaud the court for doing so. But wait a minute, you say, that statute and this issue sure sound familiar.

Problem was, the only Tennessee court that mattered -- the Tennessee Supreme Court -- had actually not interpreted the statute that way, would not do so for another 29 years, and indeed, at the time of Williamson County, limited the inverse condemnation statute to physical occupation and "nuisance-type" takings:

Slip op. at 11. In Phillips, the Tennessee court noted that the issue of whether compensation under the inverse condemnation statute was available for regulatory takings claims was "an issue of first impression for this Court." Slip op. at 9.

Which naturally takes us to the question of how could the U.S. Supreme Court in 1985 base its decision in Williamson County -- and have created the takings ripeness doctrine -- by concluding that Tennessee law allowed a regulatory takings plaintiff to recover compensation a quarter-century before the Tennessee Supreme Court actually determined that's what Tennessee law allows?

The short answer, of course, is that the U.S. Supreme Court simply got it wrong (as noted by Professor Kanner in this post), and as a consequence, gave us the flawed ripeness rules of Williamson County that we've been stuck with ever since. We raise this not to point out how prescient the U.S. Supreme Court was in Williamson County regarding Tennessee law, but that we must take the Court's statements about what state law may or may not allow with a grain of salt where the state supreme court has not weighed in explicity.

This episode also highlights the problem of appellate courts going off on their own to address issues not raised, briefed, or argued by the parties (remember, the parties in Williamson County argued only about whether a temporary taking could be a taking at all, and it was the Court which raised the "ripeness" issue on its own). As illustrated by this case, sometimes the court has no idea what it is talking about.

Being a Saturday, we should have been out enjoying the nice weather, but we were in the office when KHON2 dropped by to find out more:

With as little as a few hundred votes separating some of the primary races, there’s some hope for losing candidates before November’s General Election.

We spoke with an attorney who specializes in election law.

“The most obvious approach is what’s called an election contest and that’s very unusual circumstance where you would go straight to the Hawaii Supreme Court,” said attorney Robert Thomas.

Candidates would have until this Thursday to file a complaint. The Supreme Court would then have four days to make a ruling.

For Congresswoman Hanabusa, there are other options. On Thursday, a judge denied Hanabusa’s temporary restraining order to postpone the Puna elections until a later date, claiming residents needed more time.

“So there’s always, of course, perhaps, the option of appealing the judge’s ruling from the Big Island on Thursday because he said the election could go forward, but now maybe depending, they can always appeal that,” Thomas said.

August 13, 2014

To follow up on our earlier post about issues to look for in the legal challenge to the Hawaii Chief Elections Officer's choice to hold the delayed Democratic Party primary election on Friday, August 15, 2014, rather than keep the 21-day window open, here are the Complaint and Motion for Temporary Restraining Order filed this morning in the circuit (trial) court on the Big Island. As we suspected might be the case, the Hawaii Supreme Court's original jurisdiction to hear election contests was not invoked, since the relief sought by the complaint is to stop Friday's planned election, and delay it to some other time.

You can read the documents themselves (thank you, Honolulu Civil Beat, for posting them), but here is the short version:

The plaintiff is Democrat Colleen Hanabusa, a candidate for the Democratic Party's nomination as U.S. Senator. There are two claims for relief:

The first is a federal civil rights claim under the (Anti-) Ku Klux Klan Act of 1871 (also known as 42 U.S.C. § 1983), which can be invoked any time a person is alleged to have deprived the plaintiff of their federal rights under "color of state law." The federal rights which "Plaintiff and the voters" allegedly possess are "their rights with respect to voting as guarantee by the First and Fourteenth Amendments to the United States Constitution and 42 U.S.C. § 1971."

Relief sought: stop the Chief Election Officer from holding the postponed election in the two Puna precincts on August 15, 2014. That's it.

The motion for preliminary injunction asserts that holding the postponed election on Friday is just too soon, essentially because the two precincts are still a mess. Besides, the motion asserts, there's no harm in watiing just a bit longer since we have up to 21 days to have a postponed election.

One issue we predict: whether the plaintiff has standing to assert the claims asserted. Assuming that everything the complaint says is true, she's not a Puna voter and won't be disenfranchised or suffer an injury to the voting rights alleged, except in a secondary way (I might not get more votes if the election is held on Friday). Hawaii state courts have pretty relaxed standing requirements (the need for the plainitff to have suffered the injury alleged), but last time we checked, you still don't have standing to allege that someone else was injured. We wonder why at least one Puna registered voter was not named as a plaintiff.

As usual, we have more questions than answers, but we'll probably know more once the Elections Officer responds.

June 18, 2014

Remember that decision by a U.S. District Court in Tampa, Florida last year that we crowed about? The court held that a county's "Right of Way Preservation Ordinance" which allows it to land bank for future road corridors by means of an exaction is "both coercive and confiscatory in nature and constitutionally offensive in both content and operation."

A property owner brought a substantive due process claim, and the court first rejected the county's argument that the substantive due process claim was not ripe under Williamson County because Hillcrest had not pursued a waiver or variance. It also concluded the Right of Way Preservation Ordinance violated the Takings Clause because it shifts the burden to disprove rough proportionality to the property owner and empowers the county to obtain land in excess of what it would otherwise get in the absence of the ordinance. The court enjoined enforcement of the ordinance.

The county filed an interlocutory appeal, and the Eleventh Circuit reversed. Applying Florida's personal injury statute of limitations, In Hillcrest Property, LLC v. Pasco County, No. 13-12383 (June 18, 2014), the court held that if Hillcrest wanted to facially challenge the Ordinance, it had to have brought the claim within four years. Within four years of what, you ask? Well, within four years of knowing that it was injured. And when was it injured? When the ordinance was adopted, answered the court (which happened to be more than 4 years before Hillcrest brought its claim).

But wait, you say, isn't this a "knew or should have known" situation, and how could Hillcrest have known it was injured until it put together its development proposal and actually tried to develop the land (you know, to avoid a Williamson County type claim)? Not relevant, held the court, this is a facial challenge to the ordinance, and even though a case of first impression in the Eleventh Circuit, the Ninth and Sixth hold that a facial claim accrues upon adoption of the ordinance.

We are persuaded by the reasoning expressed by our sister circuits in Kuhnle and Action Apartment Association. Hillcrest’s land became encumbered immediately upon the Ordinance’s enactment in 2005. Its property would havedecreased in value at that time because any current or future development plans would have been subject to the Ordinance’s requirement that, in exchange for granting a commercial development permit, Hillcrest would have to deed part of the land to the county without payment for the acquisition. This injury should have been apparent to Hillcrest upon the Ordinance’s passage and enactment because it had been the owner of the property since 2001 and had been actively engaged in developing the property since at least 2003.

Slip op. at 9.

The court relied on Action Apartment Ass'n v. Santa Monica Rent Control Bd., 509 F.3d 1020 (9th Cir 2007) for this proposition. Ninth Circuit Judge Alarcon, sitting by designation, authored the Hillcrest Property opinion, so perhaps it should not come as a suprise that the court found a Ninth Circuit case persuasive. The one interesting line in the opinion is on page 5, where the court notes that the issue is one of first impression in the Eleventh Circuit but that "[s]ome of our sister circuits, however, have applied this rule to facial substantive due process claims alleging property deprivations." Slip op. at 5 (emphasis added). Some? Are there others which don't?

And how does the court's conclusion square with the county's argument in the District Court that the case wasn't even ripe? "A foolish consistency is the hobgoblin of little minds," you little statesman. Or so counseled Emerson. And the Eleventh Circuit, even though it never addressed this arguing-in-the-alternative approach.

Robert Thomas, a Hono­­lulu attorney who specializes in land use and government law, said he does not see the difference causing any constitutional problems for Hono­lulu because the key part of the 9th Circuit ruling was its determination that the Seattle law regulates conduct and not free speech.

"It's just conduct and not free speech, and the First Amendment (guaranteeing free speech) doesn't really kick in at that point," Thomas said.

Homeless advocates may still argue that the bill would criminalize homelessness, he said.

A number of jurisdictions, particularly on the West Coast, have sit-lie laws in place. A municipal judge in Portland, Ore., struck down that city's sit-lie law in 2009 for being overly broad, although efforts appear to be underway to craft a new version. Opponents to such legislation may also try to tackle it through the state court system, Thomas said.

As for the no-evacuation ordinance:

Thomas said a cursory check of U.S. law databases found prohibitions against urination and defecation to be quite common, and none has been successfully challenged and turned back.

"I think it would be awful tough to convince a court that this is unconstitutional," Thomas said. "It's basically public hygiene."

Here are the merits briefs in an important case set for argument later this month in the Hawaii Supreme Court.

The litigation is a series of two lawsuits that originated in state court in the Third Circuit (Big Island), one an original jurisdiction civil rights lawsuit, the other an administrative appeal. The essence of the plaintiff's allegations is that the State Land Use Commission wrongfully amended the land use boundaries from urban to agriculture. Many years earlier, the LUC had amended the boundary to urban on the condition that the owner provide a certain number of affordable units by 2006. In 2008, the developer had not done so and the LUC ordered it to show cause why the land classification should not revert to agricultural.

The State removed the civil rights lawsuit to U.S. District Court in Honolulu and promptly moved to dismiss, and this is the matter now before the Ninth Circuit. In the administrative appeal, the state court smacked the LUC pretty hard, and issued issued an order vacating the LUC's reclassification. The court concluded the LUC exceeded its statutory authority, and violated the developers' due process, fifth amendment, and equal protection rights. That's the ruling now on appeal in the Hawaii Supreme Court. More background on the case here.

This appeal was transferred from the Intermediate Court of Appeals (hence the ICA caption on the briefs). Under Hawaii's appellate rules, after the briefs are filed, a party may ask that the appeal be moved from the ICA to the Supreme Court, thus skipping one level.

This appeal arises out of a dispute over the classification of approximately 1,060 acres of land in Waikoloa on Hawai`i Island. In 1989, the land was reclassified from the agricultural land use district to the urban land use district in order to allow for the development of a residential community. The land was reclassified subject to the condition that at least sixty percent of the units be for affordable housing. Over time, the land changed hands several times and the Land Use Commission (LUC) amended the affordable housing condition.

By 2005, the condition required Bridge Aina Le`a (Bridge) to construct no fewer than 385 affordable housing units, provide certificates of occupancy for all of these units by November 17, 2010, and submit a joint venture agreement and mass grading contract no later than November 17, 2006. In December 2008, the LUC issued an order to show cause why the land should not revert to the former agricultural land use classification. The LUC stated that it had reason to believe that Bridge and its predecessors in interest had “failed to perform according to the conditions imposed and to the representations and commitments made to [the LUC] in obtaining reclassification of the Subject Area and in obtaining amendments to conditions of reclassification.” The LUC specifically cited the affordable housing condition in the order, among others. Early in 2009, Bridge informed the LUC that it intended to assign its interest in the land to DW Aina Leʻa Development (DW) through an installment sale. After proceedings over the course of several years, the LUC issued an order reverting the land to the agricultural use district. Bridge and DW each appealed and their cases were consolidated.

The Circuit Court of the Third Circuit issued findings of fact, conclusions of law, and an order reversing and vacating the LUC’s order. The circuit court concluded that the LUC: (1) exceeded its statutory authority and violated HRS chapter 205; (2) violated HRS §§ 205-4(h), 205-17, and 205-4(g); (3) violated HRS chapters 91 and 205 and HAR chapter 15; and (4) violated Bridge’s and DW’s due process and equal protection rights.

On appeal, the LUC raises the following three points of error. First, the LUC asks whether the circuit court erred in equating the reclassification process set forth in HRS § 205-4(a) (Supp. 2012) with the reversion process set forth in HRS § 205-4(g) (2001). Second, the LUC asks whether the circuit court erred in considering matters not part of the record in violation of HRS § 91-14(g) (2012) and HRS § 91-9(e) (2012). Third, the LUC asks whether the circuit court erred in determining in an agency appeal that the LUC and individual commissioners violated Bridge’s and DW’s constitutional rights to equal protection and due process.

June 11, 2014

Here is the oral argument recording in Bridge Aina Lea, LLC v. Chock, Nos. 12-15971, 12-16076, case argued yesterday in the Ninth Circuit at its session in Honolulu. As we previewed, the issues involved Pullman abstention and immunity. As for Williamson County ripeness, an issue the court asked the parties to brief separately, one of the judges (it sounds to us like Judge William Fletcher) said he was "haunted by Williamson County" (click forward to the 12:25 mark). Aren't we all, Your Honor, aren't we all.

Next up, the oral arguments in the Hawaii Supreme Court in the state court case, scheduled for June 25, 2014, which may have an impact on the federal appeal (one judge asked counsel, "What if we wait until the Hawaii Supreme Court does whatever it's about to do, will that illuminate these issues for us?"). More on that soon.

June 9, 2014

It's been our experience that when a court of appeals -- particularly when it's the Ninth Circuit, and it's the eve of oral argument -- raises an issue on its own after the briefs have been filed and requests supplemental briefing, then whatever that issue is must really be on the judges' minds. They're the cream of the crop (right?) and along with their cohort of law clerks (the next generation cream), they know the law (right?). And, as one Ninth Circuit judge candidly revealed at one of those bench/bar tip sessions last year, law clerks like nothing better than to catch the advocates in a misstatement or to find a missed argument, so they can present the issue to their judge like a cat bringing home a dead bird to its master (we're paraphrasing that last bit, of course, but the judge did say that clerks groove on finding things the lawyers get wrong or have missed).

So it is with great interest that we post the latest in a case we've been following, which will be argued before an august panel of the Ninth Circuit on June 10, in Honolulu. We're talking, of course, about Bridge Aina Lea, LLC v. Chock, Nos. 12-15971, 12-16076, which we blogged about last week (including the full set of briefs on the appeal and cross-appeal). The issues before the court on appeal read like an outline for a 3L Federal Courts class, and involve a claim for absolute and qualified immunity (several members of the State of Hawaii Land Use Commission were sued by the property owner in their individual as well as official capacities), Younger and Pullman abstention, and the like. The substantive claims include due process, equal protection, and takings claims (among others). This is manna to us law nerds.

But after briefing was submitted, the Ninth informed the parties that Williamson County ripeness was on the panel's mind, and if the parties would submit 10-page letter briefs on the applicability of that case, Their Honors would be most appreciative. Odd. But when judges ask you this sort of thing even though you may be puzzled, you can't politely decline or say "really?" in your brief, although as the letter briefs posted below reveal, that's pretty much what both sides did because both the property owner and the LUC agree that Williamson County has little if anything to do with the issues before the court on appeal:

As to the "final decision" prong of the ripeness test, there's no question there's no more administrative process to play out, so it is strange the court would ask for briefing on that. The LUC made its decision, there's no process to reconsider or to mitigate it (don't get us started on so-called "variance" in federal takings jurisprudence), and there's nowhere else to go but to court. Which the plaintiff did. Indeed, it went to state court, and it was the LUC which removed the case to federal court.

Which takes us to the second prong of Williamson County, the requirement for a plaintiff to utilize available state procedures to obtain compensation. As noted, the plaintiff did just that, and it was the LUC which took the case to federal court. Thus, there is little doubt that this prong of Williamson County should not apply here, unless the Ninth is willing to join those courts which have concluded that Williamson County requires a federal court to grant a motion to dismiss because the case is not in state court, made by the party that brought the case to federal court from state court. Amazingly, this argument gets traction in some courts, although there have been other cases where the courts have rightly seen through this argument's inherent chutzpah. The LUC, being the party which removed the case to federal court, rightly does not argue that Williamson County now demands dismissal from federal court for the plaintiff's not seeking compensation in state court.

So with both parties agreeing that Williamson County doesn't have much, if any, impact on the appeal, where does that leave us, and why did the court even raise the issue when the answer was, in our view (and, to the parties) so obvious? The panel is comprised of Circuit Judges William A. Fletcher, Sandra Ikuta, and Andrew Hurwitz, if that information might help tell you about why they think the case is relevant. We sure can't understand it. Maybe we'll find out on Tuesday.

May 29, 2014

Before we get to today's post (kindly provided by our colleague and friend Paul Schwind), and the Ninth Circuit briefs, here's some background on the cases he writes about.

On June 10, 2014, the Ninth Circuit will ride circuit to Honolulu and hear oral arguments in a case which we've posted about before. The litigation is a series of two lawsuits that originated in state court in the Third Circuit (Big Island), one an original jurisdiction civil rights lawsuit, the other an administrative appeal (that's a writ of administrative mandate for you Californians). The essence of the plaintiff's allegations is that the State Land Use Commission wrongfully amended the land use boundaries from urban to agriculture. Under Hawaii's statewide land use planning scheme, the LUC, a state agency, has jurisdiction over these "boundary amendments," which look and act a whole lot like a change in municipal zoning for those of you who practice land use law elsewhere. We're not sure why we call it a "boundary amendment" rather than a "zoning change," except that we've always done it that way around here. The plaintiff sued the State, the LUC, and the individual commissioners who voted to reclassify the land. Here's Paul's earlier detailed write up about the facts underlying both cases.

The State removed the civil rights lawsuit to U.S. District Court in Honolulu and promptly moved to dismiss, and this portion of the case nearly caused us to flash back to our Federal Courts class in law school, since it raised a host of procedural questions such as the effect of removal, whether certain defendants are "persons" under 42 U.S.C. § 1983, whether the federal court must abstain from addressing the federal takings claim, whether there is a state damage remedy for deprivation of constitutional rights, and zoning estoppel under Hawaii law, among others.

In 2012, in the administrative appeal in state court, the trial court issued Findings of Fact and Conclusions of Law, and Order Reversing and Vacating the State of Hawaii Land Use Commission's Final Order, DW Aina Lea Dev. LLC v. State of Hawaii Land Use Comm'n, No. 11--1-0112K (Haw. Third Cir. Mar. 6, 2012). It's a long ruling, and we won't go into great detail, but suffice it to say the court concluded the LUC exceeded its statutory authority, and violated the developers' due process and equal protection rights. The LUC appealed to the Hawaii Intermediate Court of Appeals, and eventually, the Hawaii Supreme Court transferred the case to itself (thus avoiding the need to have the ICA weigh in on an issue that obviously was going to end up on the Supreme Court's docket eventually). As a consequence, in this order (Mar. 30, 2012), the district federal court stayed further action in the federal case. But it did not determine that the LUC commissioners were entitled to immunity, as the State urged.

Neither party was happy with the District Court's disposition. The State appealed to the Ninth Circuit, arguing that the District Court should have found the commissioners immune from suit, while the plaintiff cross-appealed, asserting the court, after abstaining, should have remanded the case to the state court where it was originally filed.

Here's Paul.

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Update On The Federal Court Case About The State Of Hawaii Land Use Commission's Power to Reclassify Land Upon An Order To Show Cause

by Paul J. Schwind*

When we last reported on these closely linked federal and state cases in December 2011 (Bridge Aina Lea, LLC v. State of Hawaii Land Use Commission et al., 1:11-CV-00414-SOM-BMK (D. Haw., June 27, 2011); DW Aina Lea Dev. LLC v. Bridge Aina Lea LLC et al., 3CC11-1-00112K (Haw. 3d Cir., Apr. 7, 2011)), a federal court hearing had concluded with a request to the parties to submit supplemental briefing stating their positions on the question of how the state court's ruling (when available) may affect the issues before the federal court, including the jurisdictional question.

In the U.S. District Court for the District of Hawaii, on March 9, 2012, petitioner/plaintiff Bridge Aina Lea essentially concluded in its supplemental memorandum filed with Judge Mollway that the case should be remanded from federal to state court based on the discretionary Pullman abstention doctrine, but not the four-condition Younger abstention doctrine, in part because the State waived Younger by removing the action to federal court. See Railroad Comm'n v. Pullman Co., 312 U.S. 496 (1941) (federal courts, when asked for the extraordinary remedy of injunction, will exercise sound discretion in the public interest to avoid needless friction with state policies); Younger v. Harris, 401 U.S. 37 (1971) (possible facial unconstitutionality of a [state] statute does not in itself justify an injunction against good-faith attempts to enforce it, absent any showing of bad faith, harassment, or any other unusual circumstance that would call for equitable relief).

Bridge Aina Lea argued that the state court ruling issued on March 6 validates its (Bridge’s) constitutional claims, including just compensation for a temporary taking, and that the legitimacy of Bridge’s § 1983 claims entitle it to declaratory/injunctive relief not available under the Hawaii Administrative Procedures Act, Haw. Rev. Stat. ch. 91. Bridge further argued that the respondent/defendant LUC commissioners are not entitled to either absolute or qualified immunity in their individual capacities.

As of March 9, 2012, after the parties timely filed supplemental memoranda re the effect of the state court ruling, a continued hearing on the matter was held on March 19. On March 30, 2012, Judge Mollway stayed further action in federal court regarding the monetary and injunctive relief sought for alleged due process, equal protection, and takings claims from the LUC reclassification (“downzoning”) action, pending final resolution of the state court case.

The LUC filed a Notice of Appeal to the Ninth Circuit Court of Appeals on April 25, 2012, followed by Bridge Aina Lea’s Notice of Cross Appeal on May 4, 2012. The issues presented for review are: (1) whether the district court erred by refusing to rule on individual LUC commissioners’ right to absolute (quasi-judicial) immunity and qualified immunity, thereby consigning the individual commissioners to years with the shadow of this lawsuit hanging over their heads; (2) whether individual commissioners are entitled to absolute (quasi-judicial) immunity with respect to a decision made by way of a contested case hearing where under Hawai‘i law “performing an adjudicatory function is inherent in a contested case hearing”; and (3) whether individual commissioners are entitled to qualified immunity.

After the parties submitted their briefs, which are posted below, the Ninth Circuit asked for letter briefing on an issue it raised sua sponte:

Filed clerk order (Deputy Clerk: SM): The parties are directed to provide simultaneous letter briefs, addressing the effect on this case of Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1984). The letter briefs are to be no longer than ten pages, double spaced, and should be filed no later than Thursday, June 5, 2014.

Barista's note: You'd think that since this was a case in which the State removed the case to federal court, that it should not be able to say that the "state litigation" prong of Williamson County governs (and indeed, the State has not raised the argument). Perhaps the Ninth only is asking whether the plaintiff has received a final decision from the LUC. or wants to deal directly with an issue that other circuits have recently? We'll find out on or about June 5, we suppose.

The Ninth Circuit has scheduled oral argument at its Honolulu hearing room on June 10, 2014. We'll have more after the hearing.

Check this out, just received: In Sherman v. Town of Chester, No. 13-1503-cv (May 16, 2014), the U.S. Court of Appeals for the Second Circuit held that a takings claim was ripe, and that Williamson County does not stand in the way.

We love the way this opinion starts off, with a literary reference:

Hungry Joe packed up his bags and wrote happy letters home. He had flown the 25 missions required to complete a tour of duty. But thing were not so simple on Catch-22's Pianosa island. He soon discovered that Colonel Cathcart had just raised the number of missions to 30, forcing Hungry Joe to uppack his bags and rewrite his happy letters. At the time, Yossarian had flown 23 missions.

. . .

When Yossarian reached 51 missions, he knew it was no cause to celebrate: “He’ll raise them,” Yossarian understood. He appealed to squadron commander Major Major to be exempted from flying his four remaining missions. “Every time I get close he raises them,” Yossarian complained. Major Major responded, “Perhaps he won’t this time.” But of course Yossarian was right. Colonel Cathcart raised the number to 60, then 65, then 70, then 80, with no end in sight.

Plaintiff Steven M. Sherman must have felt a lot like Yossarian in his decade of dealing with defendant Town of Chester.

Slip op. at 3-4.

And it gets better. The opinion details how Mr. Sherman sought subdivision approval from the Town, after which the Town adopted a new zoning ordinance. In response to his new subdivision application, the Town again adopted a new zoning ordinance. "When he created another revised plan in 2005, the Town changed its zoning laws once more. And again in 2006. And again in 2007." Slip op. at 4. The opinion details the "even more hurdles" the Town put in the way. See slip op. at 4-5. "By the time this lawsuit was filed, over ten years had passed." Id. at 5.

Who among us can say that the've not experienced the same "ever-changing labyrinth of red tape," as the court put it? Slip op. at 4.

But the District Court dismissed his takings claim as not ripe under Williamson County, "because Sherman had not received a final decision on his property and seeking a final decision would not be futile. The court reasoned that while Sherman may have to jump through more hoops in the future, he had not established that his application would definitely be denied in the end. To Sherman, this must have sounded a lot like: "Perhaps he won't raise the number this time.'" Slip op. at 5-6.

The rest of the opinion goes on like this, concluding that for Sherman to continue to pursue a final decision from the Town would have been as futile as Yossarian asking for favors from Col. Cathcart, and that the "state procedures" prong of Williamson County did not stand in the way because Sherman had initially filed his case in state court, and the Town had removed it to federal court. Slip op. at 26.

Read that last bit again, in case you missed it: Sheman filed in state court, and the Town removed it to federal court. After which, it claimed that the case should be dismissed because the case could only be heard by the state courts.

You really can't make this stuff up, can you? Amazingly, this argument gets traction in some courts (like the District Court here), although there have been other cases where the courts have rightly seen through this argument's sleight-of-hand. But until all of the Courts of Appeals rule definitively, or the Supreme Court finally reevaluates Williamson County, property owners should expect the tactic to be deployed. Because who knows, there may be a court receptive to the idea, as was the District Court.

We think you should take a few minutes out of your day to read the opinion in its entirety. Any summary by us could not do the opinion justice, either in its recitation of the facts, nor its analysis of the law.

But we will say this. We note that the federal courts of appeals may be starting to see the light, and finally understand how Williamson County really works. As our colleage Dave Breemer recently wrote, the "prudential ripeness doctrine provides [federal courts] with a basis to spare takings plaintiffs from the worst injustices of the state litigation rule until the Supreme Court finally puts this rule where it belongs: in the waste pile of failed constitutional doctrines." The Sherman opinion also reflects what may be a growing fatigue in the federal judiciary with state and local governments deploying these type of "death by a thousand days" tactics. We've seen it this tactic used in non-takings cases also, and Sherman's recitation of the facts should be familiar to many of you. The Supreme Court certainly seems fed up. So we leave you with this, the Sherman opinion's reaction to the Town's efforts to bleed out the property owner:

This analysis does not account for the nature of the Town’s tactics. The Town will likely never put up a brick wall in between Sherman and the finish line. Rather, the finish line will always be moved just one step away until Sherman collapses. In essence, the Town engaged in a war of attrition with Sherman.

. . .

Seeking a final decision would be futile because the Town used – and will in all likelihood continue to use – repetitive and unfair procedures, thereby avoiding a final decision. Sherman is therefore not required to satisfy the first prong of Williamson County.

Slip op. at 24-25.

One final note: the tactics apparently worked, and this case adds to the list where the claim had to be prosecuted by the survivors of the property owner: "The Town's machinations to prevent the developent of MareBrook were not without their cost. Between taxes, interest charges, carrying costs, and expenses, Sherman spent approximately $5.5 million on top of the original $2.7 purchase price. As a result, Sherman became financially exhausted to the point of facing foreclosure and possible personal bankruptcy. And while the case was pending on appeal, Sherman died. Nancy J. Sherman, his widow, was substituted as his personal representative." Slip op. at 15 (footnote omitted).

April 30, 2014

Back in October, we had the honor of moderating a discussion about the ripeness issue in takings law at the 40th Anniversary Symposium on The Takings Issue at Touro Law School (see here and here for more). Professor Vicki Been and Pacific Legal Foundation's J. David Breemer were the panelists, each weighing in on how Williamson County came to be, and what future the rule may have, if any.

The Touro Law Review has now published Dave's article, "The Rebirth of Federal Takings Review? The Courts' 'Prudential' Answer to Williamson County's Flawed State Litigation Ripeness Requirement." Here's the summary:

This article addresses recent developments in the law of takings arising from the courts’ application of the rule, articulated in Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 185 (1985), that a property owner must sue for damages in state court to ripen a Fifth Amendment takings claim. The article reviews the confusion and inequity caused by this “state litigation” ripeness rule, and the Supreme Court’s and lower federal courts’ recent attempts to weaken the rule, so as to allow some takings claimants to litigate in federal court.

Williamson County’s state litigation ripeness doctrine requires property owners to litigate for just compensation in state court before they can file a federal takings claim in federal court. But in practice, this rule interacts with other jurisdictional principles, such as federal claim and issue preclusion, in a manner that bars property owners from raising state-court ripened takings claims in federal court. As a result, plaintiffs must file their Fifth Amendment takings claims in state court. Yet, this opens the door for defendants to leverage removal principles and Williamson County to entirely deprive a takings plaintiff of any judicial forum for their case. If a defendant removes a state court takings case to federal court, it prevents the plaintiff from litigating in state court - the only available forum under Williamson County - and brings the removed claim to the federal forum in an unripe state; i.e., prior to full exhaustion of state court litigation. Federal courts often dismiss such removed takings cases, leaving the plaintiff without access to the courts for their Fifth Amendment takings claim.

The article explains that these problems arise from a jurisdictional understanding of the state litigation rule and that the Supreme Court has abandoned this view. The Court has transformed the state litigation rule from a strict jurisdictional rule into a discretionary "prudential" ripeness concept. The article highlights how federal courts are using the new, "prudential" conception of Williamson County to decline to require state litigation for takings ripeness and defends this approach.

It concludes that the courts' application of Williamson County as a discretionary, prudential ripeness doctrine provides them with a basis to spare takings plaintiffs from the worst injustices of the state litigation rule until the Supreme Court finally puts this rule where it belongs: in the waste pile of failed constitutional doctrines.

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At the 2016 Brigham-Kanner Property Rights Conference in the Hague, The Netherlands (October 19-20, 2016, I'm speaking on two panels: "Property's Role in the Fundamental Political Structure of Nations," and "Defining and Protecting Property Rights in Intangible Assets." More information here.

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